SB-0500, As Passed House, December 10, 2015

SUBSTITUTE FOR

SENATE BILL NO. 500

     A bill to amend 1936 (Ex Sess) PA 1, entitled

"Michigan employment security act,"

by amending section 44 (MCL 421.44), as amended by 2011 PA 269.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 44. (1) "Remuneration" means all compensation paid for

personal services, including commissions and bonuses, and except

for agricultural and domestic services, the cash value of all

compensation payable in a medium other than cash. Any remuneration

payable to an individual that has not been actually received by

that individual within 21 days after the end of the pay period in

which the remuneration was earned, shall, for the purposes of

subsections (2) to (5) and section 46, be considered to have been

paid on the twenty-first day after the end of that pay period. For

benefit years beginning on or after October 1, 2000, if If back pay

is awarded to an individual and is allocated by an employer or

legal authority to a period of weeks within 1 or more calendar

quarters, the back pay shall be considered paid in that calendar

quarter or those calendar quarters for purposes of section 46. The

reasonable cash value of compensation payable in a medium other

than cash shall be estimated and determined in accordance with

rules promulgated by the unemployment agency. Beginning January 1,

1986, remuneration shall include Remuneration includes tips

actually reported to an employer under section 6053(a) of the

internal revenue code, 26 USC 6053(a), by an employee who receives

tip income. Remuneration does not include either of the following:

     (a) Money paid an individual by a unit of government for

services rendered as a member of the national guard National Guard

of this state, or for similar services to another state or the

United States.

     (b) Money paid by an employer to a worker under a supplemental

unemployment benefit plan consistent with the criteria for a

supplemental unemployment benefit plan as described in internal

revenue service Internal Revenue Service publication 15-A,

employer's supplemental tax guide, regardless of whether the

benefits are paid from a trust or by the employer.

     (2) "Wages", subject to subsections (3) to (5), means

remuneration paid by employers for employment and , beginning

January 1, 1986, includes tips actually reported to an employer

under section 6053(a) of the internal revenue code, 26 USC 6053(a),

by an employee who receives tip income. If any provision of this

subsection prevents this state from qualifying for any federal

interest relief provisions provided under section 1202 of title XII

of the social security act, 42 USC 1322, or prevents employers in

this state from qualifying for the limitation on the reduction of

federal unemployment tax act credits as provided under section

3302(f) of the federal unemployment tax act, 26 USC 3302, that

provision is invalid to the extent necessary to maintain

qualification for the interest relief provisions and federal

unemployment tax credits.

     (3) For the purpose of determining the amount of contributions

due from an employer under this act, wages shall be are limited by

the taxable wage limit applicable under subsection (4). For this

purpose, wages shall exclude all remuneration paid within a

calendar year an employing unit pays to an individual by an

employing unit after the individual was paid within that year by

that employing unit remuneration equal to that exceeds the taxable

wage limit on which unemployment taxes were paid or were payable in

this state and in any other states for that employee by the

employing unit within that year. If an a successor employing unit ,

hereinafter referred to as successor, during any calendar year

becomes a transferee during a calendar year in a transfer of

business, as defined in section 22, of another, hereinafter

referred to as a predecessor , employing unit and immediately after

the transfer employs in his or her trade or business an individual

who immediately before the transfer was employed in the trade or

business of the predecessor, then for the purpose of determining

whether the successor has paid remuneration with respect to

employment equal to the taxable wage limit to that individual

during the calendar year, any remuneration with respect to

employment paid to that individual by the predecessor during the

calendar year and before the transfer shall be considered as having

been paid by the successor.

     (4) The taxable wage limit for each calendar year is $8,000.00

in the 1983 calendar year, $8,500.00 in the 1984 calendar year,

$9,000.00 in the 1985 calendar year, $9,500.00 in the calendar

years 1986 through 2002, and $9,000.00 for calendar years after

2002 and before 2012, or the maximum amount of remuneration paid

within a calendar year by an employer subject to the federal

unemployment tax act, 26 USC 3301 to 3311, to an individual with

respect to employment as defined in that act that is subject to tax

under that act during that year for each calendar year, whichever

is greater. For calendar years beginning 2012, the taxable wage

limit is $9,500.00, but if at the beginning of a calendar quarter

the balance in the unemployment compensation fund equals or exceeds

$2,500,000,000.00 and the agency projects that the balance will

remain at or above $2,500,000,000.00 for the remainder of the

calendar quarter and for the entire succeeding calendar quarter,

the taxable wage limit for that calendar quarter and the succeeding

calendar quarter is $9,000.00 for an employer that is not

delinquent in the payment of unemployment contributions, penalties,

or interest. For calendar years beginning 2016, if on June 30 of

the preceding year the balance in the unemployment compensation

fund equals or exceeds $2,500,000,000.00 and the agency projects

that the balance will remain at or above $2,500,000,000.00 for the

succeeding calendar quarter, the taxable wage limit for the

calendar year is reduced to $9,000.00 for an employer that is not

delinquent in the payment of unemployment contributions, penalties,

or interest. If the unemployment compensation fund balance on June

30 or the agency projection does not meet these conditions, the

$9,500.00 taxable wage limit applies to all employers in the next

calendar year. For purposes of this subsection, an employer is

delinquent in the payment of unemployment contribution, penalties,

or interest if the employer has a quarterly unpaid balance of

$25.00 or more, unless 1 or more of the following apply:

     (a) The employer has filed a timely protest or appeal of the

notice of assessment and the assessment has not become final.

     (b) Within 45 days after the beginning of the first calendar

quarter in which the reduced taxable wage base limit takes effect

for nondelinquent employers, all outstanding balances owed to the

unemployment agency are paid in full.

     (c) If the employer is a domestic employer, all applicable

contributions, interest, and penalties are paid on or before the

date specified by the agency under section 13(1).

     (5) For the purposes of this act, the term "wages" shall does

not include any of the following:

     (a) The amount of a payment, including an amount paid by an

employer for insurance or annuities or into a fund, to provide for

such a payment, made to, or on behalf of, an employee or any of the

employee's dependents under a plan or system established by an

employer that makes provision for the employer's employees

generally, or for the employer's employees generally and their

dependents, or for a class or classes of the employer's employees,

or for a class or classes of the employer's employees and their

dependents, on account of retirement, sickness or accident

disability, medical or hospitalization expenses in connection with

sickness or accident disability, or death.

     (b) A payment made to an employee, including an amount paid by

an employer for insurance or annuities, or into a fund, to provide

for such a payment, on account of retirement.

     (c) A payment on account of sickness or accident disability,

or medical or hospitalization expenses in connection with sickness

or accident disability, made by an employer to, or on behalf of, an

employee after the expiration of 6 calendar months following the

last calendar month in which the employee worked for the employer.

     (d) A payment made to, or on behalf of, an employee or the

employee's beneficiary from or to a trust described in section

401(a) of the internal revenue code of 1986, 26 USC 401(a), that is

exempt from tax under section 501(a) of the internal revenue code

of 1986, 26 USC 501(a), at the time of the payment, unless the

payment is made to an employee of the trust as remuneration for

services rendered as an employee and not as a beneficiary of the

trust, or under or to an annuity plan which, at the time of the

payment, is a plan described in section 403(a) of the internal

revenue code of 1986, 26 USC 403(a), or under or to a bond purchase

plan that at the time of the payment, is a qualified bond purchase

plan described in former section 405(a) of the internal revenue

code.

     (e) The payment by an employer, without deduction from the

remuneration of the employee, of the tax imposed upon an employee

under section 3101 of the federal insurance contributions act, 26

USC 3101.

     (f) Remuneration paid in any medium other than cash to an

employee for service not in the course of the employer's trade or

business.

     (g) A payment, other than vacation or sick pay, made to an

employee after the month in which the employee attains the age of

65, if the employee did not work for the employer in the period for

which the payment is made.

     (h) Remuneration paid to or on behalf of an employee as moving

expenses if, and to the extent that, at the time of payment of the

remuneration it is reasonable to believe that a corresponding

deduction is allowable under section 217 of the internal revenue

code of 1986, 26 USC 217.

     (6) The amendments made to this section by amendatory act 1977

PA 155 apply to all remuneration paid after December 31, 1977.

     (7) The amendments made in subsection (1) by the amendatory

act that added this subsection shall first apply to remuneration

paid after December 31, 1977.