No. 43558 (Amendment): Section R994-305-801. Wage List Requirement

(Amendment)

DAR File No.: 43558
Filed: 02/28/2019 02:47:00 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these proposed rule changes is twofold: 1) to require employers to submit quarterly wage lists using the Department of Workforce Services' (Department) online filing service; and 2) to require employers to report employees' full name, consistent with Department's current technological capacity.

Summary of the rule or change:

The Department administers the State's Unemployment Insurance (UI) Program pursuant to Sections 35A-1-202 and 35A-4-101 et seq. Section 1137 of the Social Security Act (42 U.S. Code 1320b-7(a)(3)) requires employers to submit quarterly wage reports to a state agency. The Department is the designated agency for the state of Utah. Subsection 35A-4-305(8)(a) requires employers to furnish the Department in the form as the Department may require by rule. These proposed rule changes simplify and standardizes the wage list submission process by requiring employers to submit wage lists using the Department's online filing service. Online filing is a faster and more secure way to report wages. Paper submissions travel through the postal system and must be manually data entered by Department staff, creating potential security and manual data entry error risks. The online tool will also automatically and accurately calculate tax liability. In addition, the Department will be able to shift current resources used for manual data entry to more critical functions, such as employer compliance and overpayment collection efforts. Requiring employers to submit wage lists online is consistent with the requirements of other state agencies, including the State Tax Commission. The Tax Commission began requiring online submissions in 2015. Pursuant to Section 59-10-406, employers must report the total amount of wages paid to employees in an electronic format approved by the Tax Commission. Those employers are the same employers submitting wage lists to the Department. The compliance impact of these proposed rule changes will be significantly smaller in scope than the Tax Commission change. At the time the Tax Commission required online submission less than 50% of employers were using the online services. Currently, 93% of employers are submitting wage lists to the Department online. Only 7% of employers will be required to change the way they file their wage lists. The change was discussed with the Employer Advisory Council and all agreed it would be a positive change. The UI division will be notifying all impacted employers and will provide online webinars to train those affected by this change. Additionally, these rule changes require employers to report employees' full name, consistent with the Department's current technological capacity.

Statutory or constitutional authorization for this rule:

• 42 U.S.C. Sec 1320b-7
• Section 35A-4-305

Anticipated cost or savings to:

the state budget:

These proposed rule changes are not expected to have any fiscal impact on state government revenues or expenditures because these proposed rule changes simply create a more efficient mechanism for employers to submit wage lists. Currently, fewer than 60 state agencies and local government entities do not file wage lists online. Employers are already required to submit quarterly wage reports to the Tax Commission using the Commission's online filing service. Any computer purchases or internet connections needed to become compliant with the Tax Commission can be used to meet these proposed rule changes. It is unlikely that any employer will need to acquire additional internet access, computer hardware, or software to comply with online filing. There is no fee to use the online filing service to submit wage lists.

local governments:

These proposed rule changes are not expected to have any fiscal impact on local governments' revenues or expenditures because the UI program is a state-level program that does not rely on local governments for its funding, administration, or enforcement. Currently, fewer than 60 state agencies and local government entities do not file wage lists online. Employers are already required to submit quarterly wage reports to the Tax Commission using the Commission's online filing service. Any computer purchases or internet connections needed to become compliant with the Tax Commission can be used to meet these proposed rule changes. It is unlikely that any employer will need to acquire additional internet access, computer hardware, or software to comply with online filing. There is no fee to use the online filing service to submit wage lists.

small businesses:

These proposed rule changes are not expected to have any fiscal impact on small businesses' revenues or expenditures because nothing in the proposed rule changes will affect the amount of unemployment taxes paid by any business. More than 90% of small business employers already submit wage lists online. Currently, there are approximately 4,700 small business employers not filing wage lists online. Employers are already required to submit quarterly wage reports to the Tax Commission using the Commission's online filing service. Any computer purchases or internet connections needed to become compliant with the Tax Commission can be used to meet these proposed rule changes. It is unlikely that any employer will need to acquire additional internet access, computer hardware, or software to comply with online filing. There is no fee to use the online filing service to submit wage lists.

persons other than small businesses, businesses, or local governmental entities:

These proposed rule changes are not expected to have any fiscal impact on other individuals revenues or expenditures because these proposed rule changes simply create a more efficient mechanism for employers to submit wage lists. Nothing in these proposed rule changes affect or limits a claimant's substantive eligibility for UI benefits, or limits the duration for which those benefits may be received. Further, currently employees of employers submitting quarterly wages by mail are having personal information (Social Security number and wages) submitted by their employers in an insecure way. These proposed rule changes would eliminate the risk of using postal services for such personal information submissions.

Compliance costs for affected persons:

These proposed rule changes are not expected to cause any compliance costs for affected persons because there is no fee to use the Department's online service to submit wage lists.

Comments by the department head on the fiscal impact the rule may have on businesses:

After a thorough analysis, it was determined that these proposed rule changes will not result in a fiscal impact to businesses.

Jon Pierpont, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Amanda McPeck at the above address, by phone at 801-517-4709, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

04/15/2019

This rule may become effective on:

07/01/2019

Authorized by:

Jon Pierpont, Executive Director

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Person

$0

$0

$0

Total Fiscal Costs:

$0

$0

$0

Fiscal Benefits

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$0

$0

$0

Total Fiscal Benefits:

$0

$0

$0

Net Fiscal Benefits:

$0

$0

$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

These proposed rule changes are not expected to have any fiscal impacts on non-small businesses revenues or expenditures because nothing in the proposed rule change will affect the amount of unemployment taxes paid by any business.

 

More than 90% of non-small business employers already submit wage lists online. Currently, there are approximately 1,200 non-small business employers not filing wage lists online. Employers are already required to submit quarterly wage reports to the Tax Commission using the Commission's online filing service. Any computer purchases or internet connections needed to become compliant with the Tax Commission can be used to meet this proposed rule change. It is unlikely that any employer will need to acquire additional internet access, computer hardware or software to comply with online filing. There is no fee to use the online filing service to submit wage lists.

 

The executive director of the Department of Workforce Services, Jon Pierpont, has reviewed and approved this fiscal analysis.

 

 

R994. Workforce Services, Unemployment Insurance.

R994-305. Collection of Contributions.

R994-305-801. Wage List Requirement.

(1) Federal Requirement.

Section 1137 of the Social Security Act requires employers to submit quarterly wage reports to a state agency. This Department is the designated agency for the state of Utah. The Unemployment Insurance Division of the Department uses wage information submitted by employers to establish benefit determinations for claimants and to verify employer contribution payments.

(2) Wage List Due Date.

(a) Contributory employers must file a wage list with the Form 3, Employer's Contribution Report. Reimbursable employers must file a wage list with the Form 794, Insured Employment and Wage Report. Wage lists are due the last day of the month following the end of the calendar quarter.

(b) Domestic employers electing to file an annual report must file a wage list with the Form 3D, Domestic Employer's Annual Report. The wage list is due January 31 of the year following the year wages were paid.

(c) Reimbursable employers must not file a wage list with Form 794-N, Non-insured Employment and Wage Report.

(d) Wage list due dates may be changed and extensions granted under the same provisions established for contribution reports in Rule R994-302.

(3) Wage Information Required.

Each page of the wage list must be identified by the employer's Utah registration number, the employer's name, and the quarter and year being reported. The following information must be provided for each employee as a line item on each wage list in the following order:

(a) social security number;

(b) full name[first initial, second initial and full last name]; and

(c) gross wages paid during the quarter. Section 35A-4-204 defines subject employment and Section 35A-4-208 defines wages. Only those employees who were paid wages during the quarter should be reported on the wage list.

(4) Wage Reporting Methods.

The Department will accept wage lists filed on the Department website.[approved forms, approved magnetic and electronic media, or the Department website. All wage lists reported on forms other than those provided by the Department require prior approval.]

[(a) Approved Form Reporting.

The wage list must be typewritten or machine printed in black ink so that it is capable of being processed by an optical scanner. The wage list must be on Department approved forms or on plain white paper using the exact same format, placement on the page, and spacing as on the Department approved forms. Wage list forms are available upon request from the Department or may be downloaded from the Department's website.

(b) Magnetic and Electronic Media Reporting.

Magnetic and electronic media reporting must be submitted according to specifications approved by the Department.]

(5) Wage List Total Must Equal the Quarterly Report Total.

The total amount of wages reported on the wage list must be the same as the total wages shown on the Form 3, Employer's Contribution Report. The total of the wage list for a reimbursable employer must be the same as the total wages shown as "insured payroll" on Form 794, Insured Employment and Wage Report. Wage lists consisting of more than one page must show the employer's Utah registration number, the quarter and year of the reporting period, a total for each page and a grand total for all pages on the first page.

(6) Wage Lists Corrections for Prior Quarters.

(a) Corrections to wage lists for prior quarters must be made on a separate report and not on the wage list for the current quarter. The employer must submit the following information for each employee in the following order:

(i) social security number;

(ii) full name[first initial, second initial and full last name]; and

(iii) gross wages that should have been properly reported.

(b) Each page of the wage list adjustments must be identified by the employer's Utah registration number, the employer's name, and the quarter and year.

(c) The employer must submit an explanation for the corrections being made.

(d) Corrections to wages may result in additional contributions being assessed or refunded.

(7) Penalty for Failure to Provide Wage List Information.

(a) A penalty may be assessed for each failure to submit a wage list by the due date as specified in this rule or for failure to submit a wage list in an acceptable format as specified in this rule. The penalty amount is $50 for every 15 days, or fraction thereof, that the filing is late or not in an acceptable format, not to exceed $250 per filing.

(b) The penalty will be collected in the same manner and under the same legal provisions as unpaid contributions. Waiver of the penalty will be made if the employer can show good cause for failure to provide the required wage list. Good cause is established if the employer was prevented from filing a wage list for circumstances that are compelling or beyond the employer's control. Payment of the penalty does not relieve the employer from the responsibility of filing the wage list in the acceptable format.

 

KEY: unemployment compensation, overpayments, wage list

Date of Enactment or Last Substantive Amendment: [January 8, 2013]2019

Notice of Continuation: November 20, 2014

Authorizing, and Implemented or Interpreted Law: 35A-4-305[(1)]

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