R994-304. Special Provisions Regarding Transfers of Unemployment Experience and Assigning Rates, R994. Workforce Services, Unemployment Insurance, Utah Administrative Code

Utah Administrative Code (Current through November 1, 2019)

R994. Workforce Services, Unemployment Insurance

R994-304. Special Provisions Regarding Transfers of Unemployment Experience and Assigning Rates

R994-304-101. Transfer of a Trade or Business, or Portion Thereof, with Common Ownership, Management, or Control

Latest version.

(1) The term "person" includes an individual, trust, estate, partnership, association, limited liability company, corporation, government entity, or Indian tribe. The "predecessor employer" is the employer that transfers its trade or business, or a portion of its trade of business, to another employer. The "successor employer" is the employer that acquires the trade or business, or a portion of the trade or business.

(2) Common ownership exists if an employer transfers a trade or business, or a portion of a trade or business, to another employer and at the time of the transfer:

(a) the predecessor employer owns 50% or more of the trade or business of the successor employer. For entities that issue shares of stock ownership, 50% or more of the "voting shares" of stock interest must be common to both; or

(b) an individual with a controlling interest in the predecessor trade or business, transfers that controlling interest to an individual in the successor trade or business and the parties are related in one of the following ways:

(i) spouse;

(ii) parent;

(iii) step parent;

(iv) child;

(v) step child;

(vi) sibling; or

(vii) step sibling.

(3) The Department will determine common management or control using the best available evidence.

(a) Common management will be found if the predecessor and successor employers have the same or similar:

(i) managers, officers, board of directors;

(ii) personnel and human resource policies;

(iii) operating procedures;

(iv) sales and pricing policies;

(v) collection procedures;

(vi) financing policies;

(vii) accounting practices; or

(viii) purchasing practices.

(b) Common control will be found where the predecessor and successor employers have the same or similar:

(i) control of the assets used to conduct the business enterprise;

(ii) financing and/or leasing arrangements;

(iii) contracts; or

(iv) business, professional, and regulatory licenses of the business enterprise.

(4) The factors listed in subsections 3(a) and (3)(b) of this section are not exclusive and are intended as aids for analyzing the facts of each case. The degree of importance of each factor in those subsections varies depending on the nature of the trade or business transferred. Some do not apply to certain trades or businesses and, therefore, should not be given any weight. The Department will scrutinize the facts in each case to assure that the form of the transfer does not obscure the substance of the transfer.

R994-304-102. Notification Requirements

Latest version.

(1) All parties to a transfer described in Section 35A-4-304(3)(a) must provide the following information to the Department within 30 days of the transfer date:

(a) the effective date of the transfer.

(b) the percentage of the assets, trade or business, and workforce transferred.

(d) the following information for both the predecessor and the successor employers:

(i) name;

(ii) street address;

(iii) Utah Unemployment Insurance Registration Numbers, if one has been assigned; and

(iv) Federal Employer Identification Numbers (FEIN), if one has been assigned.

(e) the name and Social Security number (SSN) or FEIN of any successor employer who was also a predecessor employer, or any individual who is related to the predecessor. Related means to have a family relationship as described in Section R994-304-101(2)(b).

(f) common management and control practices that were retained from the predecessor employer.

(g) any other information requested by the Department.

R994-304-103. Recalculation and Effective Date of Contribution Rates

Latest version.

Any employer that is a party to a transfer of an employer's trade or business described in Section 35A-4-304(3)(a) shall have its contribution rate recalculated. The effective date of the recalculation shall be the first day of the calendar quarter following the actual date of the transfer, unless the actual transfer occurred on the first day of a calendar quarter, in which case the recalculation takes effect on that day.

R994-304-104. Identification of the Transfer or Acquisition of an Employer's Workforce

Latest version.

The Department will develop and implement programs to aid in the detection and identification of employers that transfer or acquire all or a portion of another employer's workforce.