November 14, 2013, Introduced by Senators WALKER, CASPERSON, HANSEN, BOOHER, KOWALL, PROOS, MEEKHOF and BRANDENBURG and referred to the Committee on Reforms, Restructuring and Reinventing.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 43 (MCL 421.43), as amended by 2004 PA 243.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 43. Except as otherwise provided in section 42(6), the
term "employment" does not include any of the following:
(a) Agricultural service performed by an individual who is an
alien admitted to the United States to perform that service
according to sections 214(c) and 101(a)(15)(H) of the immigration
and nationality act, 8 USC 1184 and 8 USC 1101.
(b) Service performed in the employ of another state or its
political subdivisions, or of an instrumentality of another state
or its political subdivisions, except as otherwise provided in
section 42(9); and service performed in the employ of the United
States government or an instrumentality of the United States exempt
under the constitution of the United States from the contributions
imposed by this act. However, to the extent that the congress of
the United States permits states to require instrumentalities of
the United States to make payments into an unemployment fund under
a state unemployment compensation law, this act applies to the
instrumentalities and to services performed for the
instrumentalities in the same manner, to the same extent, and on
the same terms as to all other employers, employing units,
individuals, and services. If this state is not certified for any
year by the appropriate agency of the United States under section
3304(c) of the federal unemployment tax act, chapter 23 of subtitle
C of the internal revenue code of 1986, 26 USC 3304, the payments
required of the instrumentalities with respect to the year shall be
refunded by the commission from the fund in the same manner and
within the same period as provided in section 16 with respect to
contributions erroneously collected.
(c) Service with respect to which unemployment compensation is
payable under an unemployment compensation system established by an
act of congress. However, the commission shall enter into
agreements with the proper agencies under the act of congress,
which agreements take effect 10 days after publication of the
agreements in the manner provided in section 4 for regulations to
provide reciprocal treatment to individuals who have, after
acquiring potential rights to benefits under this act, acquired
rights to unemployment compensation under the act of congress, or
who have, after acquiring potential rights to unemployment
compensation under the act of congress, acquired rights to benefits
under this act.
(d) Agricultural labor. As used in this subdivision,
"agricultural labor" includes all of the following:
(i) Service performed on a farm, in the employ of any person,
in connection with cultivating the soil, or in connection with
raising or harvesting an agricultural or horticultural commodity,
including the raising, shearing, feeding, caring for, training, and
management of livestock, bees, poultry, and fur-bearing animals and
wildlife.
(ii) Service performed in the employ of the owner, tenant, or
other operator of a farm in connection with the operation,
management, conservation, improvement, or maintenance of a farm and
its tools and equipment, or in salvaging timber or clearing land of
brush and other debris left by a hurricane, if the major part of
the service is performed on a farm.
(iii) Service performed in connection with the production or
harvesting of a commodity defined as an agricultural commodity in
section 15(g) of the agricultural marketing act, 12 USC 1141j, in
connection with the ginning of cotton, or the operation or
maintenance of ditches, canals, reservoirs, or waterways not owned
or operated for profit, used exclusively for supplying and storing
water for farming purposes.
(iv) Service performed in the employ of the operator of a farm
in handling, planting, drying, packing, packaging, processing,
freezing, grading, storing, or delivering to storage, to market, or
to a carrier for transportation to market, in its unmanufactured
state, an agricultural or horticultural commodity, if the operator
produced more than 1/2 of the commodity for which the service is
performed.
(v) Service performed in the employ of a group of operators of
farms or a cooperative organization of which the operators are
members, in the performance of service described in subparagraph
(iv), but only if the operators produced more than 1/2 of the
commodity for which the services are performed.
(vi) Service performed on a farm operated for profit if the
service is not in the course of the employer's trade or business.
(vii) Subparagraphs (iv) and (v) do not apply to service
performed in connection with commercial canning or commercial
freezing or in connection with an agricultural or horticultural
commodity after its delivery to a terminal market for distribution
for consumption.
(viii) As used in this subdivision, "farm" includes stock,
dairy, poultry, fruit, fur-bearing animals, truck farms,
plantations, ranches, nurseries, ranges, and greenhouses, or other
similar structures used primarily for the raising of agricultural
or horticultural commodities.
(ix) Agricultural labor is not excluded from the term
employment if the labor is performed for an employer as defined in
section 41(5).
(e) Domestic service in a private home, local college club, or
local chapter of a college fraternity or sorority not operated for
profit. Domestic service is not excluded from the term "employment"
if performed for an employer as defined in section 41(6).
(f) Service as an officer or member of a crew of an American
vessel performed on or in connection with the vessel, except a
vessel of less than 200 horsepower, if the operating office from
which the operations of the vessel operating on navigable waters
within or without the United States are ordinarily and regularly
supervised, managed, directed, and controlled is without this
state; and service performed by an individual in or as an officer
or member of the crew of a vessel while it is engaged in the
catching, taking, or harvesting of any kind of fish including
service performed by an individual as an ordinary incident to that
activity, except service performed on or in connection with a
vessel of more than 10 net tons determined in the manner provided
for determining the register tonnage of merchant vessels under the
laws of the United States.
(g) Service performed by an individual in the employ of the
individual's son, daughter, or spouse, and service performed by a
child less than 18 years of age in the employ of the child's
parent.
(h) Service performed by real estate salespersons, sales
representatives of investment companies, and agents or solicitors
of insurance companies who are compensated principally or wholly on
a commission basis.
(i) Service performed within this state by an individual who
is not a citizen of the United States or service performed within
this state for an employer other than an American employer as
defined in section 42(12)(d), if the service is incidental to the
individual's service in a foreign country in which the base of
operation is maintained or from which the service is directed or
controlled.
(j) Service covered by an arrangement between the commission
and the agency charged with the administration of another state or
federal unemployment compensation law under which all service
performed by an individual for an employing unit during the period
covered by the employing unit's approved election. Service
described in this subdivision is considered to be performed
entirely within the agency's state or under federal law.
(k) Service performed by an individual in a calendar quarter
in the employ of an organization exempt from income tax under
section 501(a) of the internal revenue code of 1986, 26 USC 501,
other than an organization described in section 401(a) of the
internal revenue code of 1986, 26 USC 401, or under section 521 of
the internal revenue code of 1986, 26 USC 521, if the remuneration
earned is less than $50.00.
(l) Service performed in the employ of a school, college, or
university, if the service is performed by any of the following:
(i) By a person who is primarily a student at the school,
college, or university. For the purpose of this subparagraph, a
person is considered to be "primarily a student" if the individual
is enrolled in an institution, is pursuing a course of study for
academic credit, and while enrolled normally works 30 hours or less
per week for the institution.
(ii) By a spouse of a student, if given written notice at the
start of the service that the employment is under a program to
provide financial assistance to the student and that the employment
will not be covered by a program of unemployment compensation.
(m) Service performed by an individual less than 22 years of
age who is enrolled, at a nonprofit or public educational
institution that normally maintains a regular faculty and
curriculum and normally has a regularly organized body of students
in attendance at the place where its educational activities are
carried on, as a student in a full-time program, taken for credit
at the institution, which program combines academic instruction
with work experience, if the service is an integral part of the
program and the institution has certified that fact to the
employer. This subdivision does not apply to service performed in a
program established for or on behalf of an employer or group of
employers.
(n) Service performed in the employ of a hospital, if the
service is performed by a patient of the hospital as defined in
section 53(1).
(o) For purposes of section 42(8), (9), and (10), "employment"
does not apply to service performed in any of the following
situations:
(i) In the employ of a church or a convention or association of
churches or an organization that is operated primarily for
religious purposes and that is operated, supervised, controlled, or
principally supported by a church or a convention or association of
churches.
(ii) By an ordained, commissioned, or licensed minister of a
church in the exercise of the ministry or by a member of a
religious order in the exercise of duties required by the order.
(iii) Before January 1, 1978, in the employ of a school that is
not an institution of higher education and which service is also
excluded from the term "employment" as defined in section
3306(c)(8) of the federal unemployment tax act, chapter 23 of the
internal revenue code of 1986, 26 USC 3306. After December 31,
1977, in the employ of a governmental entity as defined in section
50a, if the service is performed by an individual in any of the
following capacities:
(A) As an elected official.
(B) As a member of a legislative body or of the judiciary.
(C) As a military employee of the state national guard or air
national guard.
(D) As an employee serving on a temporary basis in case of
fire, storm, snow, earthquake, flood, or similar emergency.
(E) In a position that, under or pursuant to the laws of this
state, is designated as a major nontenured policymaking or advisory
position, or a policymaking or advisory position, the performance
of the duties of which ordinarily does not require more than 8
hours per week.
(iv) By an individual receiving rehabilitation or remunerative
work in a facility conducted for the purpose of carrying out a
program of rehabilitation for individuals whose earning capacity is
impaired by age, physical or mental deficiency, or injury, or of
providing remunerative work for individuals who because of their
impaired physical or mental capacity cannot be readily absorbed in
the competitive labor market.
(v) As part of an unemployment work-relief or work-training
program assisted or financed in whole or in part by a federal
agency or an agency of a state or political subdivision of a state
by an individual receiving the work relief or work training.
(vi) By an inmate of a custodial or penal institution.
(vii) By an individual hired by a state department or recipient
governmental entity through a summer youth employment program
established under the Michigan youth corps act, 1983 PA 69, MCL
409.221 to 409.229, or an individual hired by a state department
through a summer youth employment program administered by the
department of natural resources or the department of
transportation.
(p) Service performed by an individual less than 18 years of
age in the delivery or distribution of newspapers or shopping news,
not including delivery or distribution to a point for subsequent
delivery or distribution.
(q) Service performed for an employing unit other than a
governmental entity or nonprofit organization and that is any of
the following:
(i) Service performed by an individual while the individual was
a minor student regularly attending either a public or a private
school below the college level and the individual's employment
during the week was any of the following:
(A) Less than the scheduled hours the individual would have
worked in the department or establishment in which the employment
occurred if the individual were not a student.
(B) Within the customary vacation days or vacation periods of
the school, following which the individual actually returns to
school.
(C) With an employer as a formal and accredited part of the
regular curriculum of the individual's school.
(ii) Service performed by a college student of any age, but
only if the student's employment is a formal and accredited part of
the regular curriculum of the school.
(iii) Service performed by an individual as a member of a band
or orchestra, but only if the service does not represent the
principal occupation of the individual.
(r) Subject to subdivision (s), services performed as a direct
seller, if the person is engaged in either of the following:
(i) The trade or business of selling, or soliciting the sale
of, consumer products or services to any buyer on a buy-sell basis,
a deposit-commission basis, or any similar basis that the
commission or the U.S. department of labor designates by rule or
regulation, for resale by the buyer or any other person in the home
or otherwise than in a permanent retail establishment.
(ii) The trade or business of selling, or soliciting the sale
of, consumer products or services in the home or otherwise than in
a permanent retail establishment.
(s) The exclusion of services under subdivision (r) applies
only if both of the following are met:
(i) Substantially all the cash or other remuneration, for the
performance of the services described in subdivision (r) is
directly related to sales or other output, including the
performance of services, rather than to the number of hours worked.
(ii) The services are performed according to a written contract
that provides that the person performing the services will not be
treated as an employee with respect to those services for federal
tax purposes.
(t) Service performed by an individual as a product
demonstrator or product merchandiser if the service is performed
under a written contract between the individual and a person whose
principal business is obtaining the services of product
demonstrators and product merchandisers for third parties for
product demonstration and product merchandising purposes, and both
in contract and in fact, the individual meets all of the following
conditions:
(i) Is not treated as an employee with respect to those
services for federal unemployment tax purposes.
(ii) Is compensated for each job, or the compensation is based
on factors that relate to the work performed.
(iii) Determines the method of performing the service.
(iv) Provides the equipment used to perform the service.
(v) Is responsible for the completion of a specific job and is
liable for any failure to complete the job.
(vi) Pays all expenses, and the opportunity for profit or loss
rests solely with the individual.
(vii) Is responsible for operating costs, fuel, repairs,
supplies, and motor vehicle insurance.
(viii) As used in this subdivision:
(A) "Product demonstrator" means an individual who, on a
temporary, part-time basis, demonstrates or gives away samples of a
food or other product as part of an advertising or sales promotion
for the product and who is not otherwise directly employed by the
manufacturer, distributor, or retailer.
(B) "Product merchandiser" means an individual who, on a
temporary, part-time basis, builds or resets a product display and
who is not otherwise directly employed by the manufacturer,
distributor, or retailer.
(C) "Third party" means a manufacturer or broker.
(u) Service performed in an Americorps program but only if
both of the following conditions are met:
(i) The individual performed the service under a contract or
agreement providing for a guaranteed stipend opportunity.
(ii) The individual received the full amount of the guaranteed
stipend before the ending date of the contract or agreement.
(v) Beginning April 1, 2014, nonagricultural service performed
by an individual who is an alien admitted to the United States to
perform that service under an H-2B visa issued under 8 USC 1101 or
a J-1 exchange visitor program visa issued under 8 USC
1101(a)(15)(J) and the mutual educational and cultural exchange act
of 1961, 22 USC 2451 to 2462, if all of the following conditions
are satisfied:
(i) That service is excluded from employment under section
3306(c)(19) of the internal revenue code, 26 USC 3306(c)(19).
(ii) The employer claiming the exclusion is the petitioner of
the H-2B visa holder, as documented on an approved I-129 petition
for a nonimmigrant worker; or the employer is the sponsor of the J-
1 exchange visitor program visa holder, as documented in the DS-
2019 form, and the exchange visitor program is limited to those
described in 22 CFR 62.28 to 62.32.
(iii) The employer certifies to the unemployment agency as to
each individual engaged in that service for each quarterly report
that the federal tax described in section 42(6) does not apply to
that service.
(iv) The employer claiming the exclusion maintains supporting
documentation for the claim for 6 years and, upon request, provides
the unemployment agency with documentation for compliance and
verification purposes.