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09.32.01 - Unemployment Insurance - Final Regulations

FINAL ACTION ON REGULATIONS
MARYLAND REGISTER, VOLUME 44, ISSUE 8,
FRIDAY, APRIL 14, 2017

Subtitle 32 UNEMPLOYMENT INSURANCE

09.32.01 Obligations of Employers

Labor and Employment Article, §§8-101, 8-305, 8-601, 8-602, 8-613, and 8-614, Annotated Code of Maryland

Notice of Final Action
[17-079-F]

On March 30, 2017, the Secretary of Labor, Licensing and Regulation adopted amendments to Regulation .21 under COMAR 09.32.01 Obligations of Employers. This action, which was proposed for adoption in 44:3 Md. R. 195—196 (February 3, 2017), has been adopted as proposed.

Effective Date: April 24, 2017.

KELLY M. SCHULZ
Secretary of Labor, Licensing, and Regulation

.21 Successor [Employing Units] Determinations Under §§8-613—and 8-614.
  [A. In this regulation, the following terms have the meanings indicated.
  B. Terms Defined.
    (1) “Business” or “trade” includes the employer’s workforce.
    (2) “Reorganized employer” means:
      (a) An employer that alters its legal status, including changing from a sole proprietorship or a partnership to a corporation; or
      (b) An employer that otherwise changes its trade name or business identity while remaining under any of the same ownership.
    (3) “Successor employer” means an employer that acquires, by sale or otherwise, all or part of the assets, business, organization, or trade of another employer.]
  [C.] A. (text unchanged)
  [D. An employer is not a successor employer if:
    (1) The employer acquires less than 50 percent of the employees of the predecessor employer;
    (2) The predecessor continues to pay wages to the remaining employees after the acquisition of employees by the employer; and
    (3) Other than the transfer of workforce, the employer does not acquire any tangible or intangible assets from the predecessor employer.]
  B. An employer acquiring the assets, business, organization, or trade of a predecessor employer is not a successor employer for the purposes of attributing or assigning the rate of contribution if the acquiring employer:
    (1) Has no common ownership, management, or control with the predecessor;
    (2) Acquires less than 50 percent of the payrolls or employees of the predecessor; and
    (3) Acquires less than 50 percent of the assets, business, organization, and trade of the predecessor.
    C. In acquisitions not involving common ownership, management, or control, the Secretary shall determine the proportionate value of assets, business, organization, and trade acquired by the successor based on a comparison to the total amount of assets, business, organization, and trade of the predecessor that existed on December 31 or, if the predecessor reported its financial performance based on a fiscal year (instead of calendar year), a comparison to the total amount of assets, business, organization, and trade of the predecessor that existed on the last day of the predecessor’s fiscal year immediately preceding the acquisition date.
    D. In acquisitions not involving common ownership, management, or control, the Secretary shall determine the proportionate share of the payrolls or number of employees acquired by the successor based on a comparison to the total payrolls or number of employees working for the predecessor on December 31 or, if the predecessor reported its financial performance based on a fiscal year (instead of calendar year), a comparison to the total payrolls or number of employees working for the predecessor on the last day of the predecessor’s fiscal year immediately preceding the acquisition date.

  E. [When] In acquisitions not involving common ownership, management, or control, and subject to the limitation provided in §B of this regulation, if a person acquires a part of a business, trade, or organization and the employer is classified as a [reorganized or] successor employer, the earned rate record of the acquired business, trade, or organization is transferred to the [reorganized or] successor employer according to the percent of the payrolls or assets acquired.
  F. (text unchanged)