HOUSE BILL NO. 6136
September 01, 2020, Introduced by Rep. Hall and
referred to the Committee on Commerce and Tourism.
A bill to amend 1936 (Ex Sess) PA 1,
entitled
"Michigan employment security act,"
by amending section 44 (MCL 421.44), as amended by 2015 PA 240.
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. 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. Remuneration includes tips
actually reported to an employer under section 6053(a) of the internal revenue
code of 1986, 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 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 publication Publication 15-A, employer's supplemental tax guide, 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 includes tips actually reported to an employer under section
6053(a) of the internal revenue code of 1986, 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 are limited by the taxable wage limit applicable under subsection (4).
For this purpose, wages exclude all remuneration an employing unit pays to an
individual 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 a successor employing unit becomes a
transferee during a calendar year in a transfer of business, as defined in
section 22, of 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 $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 unemployment 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 unemployment 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 of the preceding year or
the unemployment agency
projection does not meet these conditions, the $9,500.00 taxable wage limit
applies to all employers in the next calendar year. However, the $9,500.00 taxable wage limit does not apply if the unemployment
compensation fund balance on June 30 of the preceding year or the unemployment agency
projection does not meet these conditions as a result of a state of emergency
declared under 1945 PA 302, MCL 10.31 to 10.33, or the emergency management act,
1976 PA 390, MCL 30.401 to 30.421, that requires any contributing employer to
close or limit its business operations for any period of time. 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 unemployment agency under section 13(1).
(5) For the purposes of
this act, the term "wages" 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 of 1986.
(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.