RS 1539.1 - State unemployment tax avoidance; penalties
A. As used in this Section, unless the context clearly indicates otherwise, the following terms or phrases shall be given the meaning ascribed to them:
(1) "Knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.
(2) "Person" has the meaning given such term by Section 7701(a)(1) of the Internal Revenue Code of 1986.
(3) "Trade or business" shall include the employer's workforce. The transfer of some or all of an employer's workforce to another employer shall be considered a transfer of trade or business when, as the result of such transfer, the transferring employer no longer performs trade or business with respect to the transferred workforce, and such trade or business is performed by the employer to whom the workforce is transferred.
(4) "Violates or attempts to violate" includes but is not limited to intent to evade, misrepresentation, or willful nondisclosure.
B. Notwithstanding any other provision of law, the following shall apply regarding assignment of rates and transfers of experience:
(1) If an employer transfers its trade or business, or a portion thereof, to another employer and, at the time of the transfer, there is substantially common ownership, management, or control of the two employers, then the unemployment experience attributable to the transferred trade or business shall be transferred to the employer to whom such business is transferred. The experience-rating records of such predecessor employer shall be transferred as of the date of acquisition to the successor employer for the purpose of rate determination.
(2) If a person who is not an employer under this Chapter acquires the trade or business of an employer, the unemployment experience of the acquired business shall not be transferred to such person if the administrator finds that such person acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead, such person shall be assigned the applicable new employer rate under Part III of Chapter 11 of this Title. In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the administrator shall use objective factors which may include but not be limited to the cost of acquiring the business, whether the person continued the business enterprise of the acquired business, how long such business enterprise was continued, or whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition.
C. If a person knowingly violates or attempts to violate Subsection B of this Section or any other provision of this Chapter related to determining the assignment of a contribution rate, or if a person knowingly advises another person in a way that results in a violation of such provision, the person shall be subject to the following penalties:
(1) If the person is an employer, then such employer shall be assigned the highest rate assignable under this Chapter for the rate year during which such violation or attempted violation occurred and the three years immediately following this rate year. However, if the person's business is already at the highest rate for any year in which the violation occurred, or if the amount of increase in the person's rate would be less than two percent for such year, then a penalty rate of contribution of up to two percent of taxable wages shall be imposed for such year. Any amount collected over maximum rate will be deposited in the penalty and interest account established under R.S. 23:1513.
(2) If the person is not an employer, such person shall be subject to a civil money penalty of not more than five thousand dollars per violation. The fine shall be assessed by the secretary of the Louisiana Workforce Commission or his designee. Any such fine shall be deposited in the penalty and interest account established under R.S. 23:1513.
D. In addition to the penalty imposed by Subsection C of this Section, any person who violates any provision of this Section shall be guilty of a misdemeanor punishable by a fine of not more than ten thousand dollars or imprisonment for not more than six months, or both, per violation.
E. If, following a transfer of experience under Subsection B of this Section, the administrator determines that a substantial purpose of the transfer of trade or business was to obtain a reduction liability for contributions, then the unemployment experience rating attributable to each employer shall be combined into a common experience calculation. The experience-rating records of such predecessor employer shall be transferred as of the date of acquisition to the successor employer for the purpose of rate determination.
F. The administrator shall establish procedures to identify the transfer or acquisition of a business for purposes of this Section.
G. This Section shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations by the United States Department of Labor.
H. The secretary shall adopt rules necessary to administer and enforce this Section in accordance with the Administrative Procedure Act.
Acts 2005, No. 234, §1; Acts 2008, No. 743, §7, eff. July 1, 2008.