Title 28
Labor and Labor Relations

Chapter 43
Employment Security — Contributions

§ 28-43-10. Application of predecessor’s payroll record to successor employer.

(a)(1)(i) Whenever any employing unit in any manner succeeds to, or has succeeded to, or acquires, or has acquired, the organization, trade, separate establishment (provided separate payroll reports have been filed with the director for the separate establishment), or business, or substantially all the assets thereof, and whenever the successor was not prior to that acquisition an employing unit as that term is defined in § 28-42-3 of another which at the time of the acquisition was an employer subject to chapters 42 — 44 of this title, the predecessor employing unit shall be deemed to have relinquished all rights to have its prior payroll records, or in the case of a separate establishment the prior payroll records of the establishment, used for the purpose of determining experience rates of employer contributions for that predecessor, and the director shall use those prior payroll records for the purpose of determining experience rates of employer contributions for that successor. That successor shall, if not already an employer prior to that acquisition, become an employer on the date of that acquisition, and for the purpose of determining experience rates of employer contributions the director shall hereafter consider those prior payroll records of the predecessor as the payroll records of the successor, and the successor shall assume the position of the predecessor or predecessors with respect to the payroll records of the predecessor or predecessors as if there had been no change in the ownership of the organization, trade, separate establishment, business, or assets. If the successor is an employer prior to the time of the transfer, it may continue to pay employer contributions at the rate applicable to it from the date the transfer occurred until the end of the then current tax year, or it may elect to pay at the rate applicable to its predecessor for the balance of that year. If the successor is not an employer prior to the time of the transfer, it shall pay employer contributions at the rate applicable to the predecessor or, if more than one and the same rate is applicable to both, the rate applicable to the predecessor or predecessors from the date the transfer occurred until the end of the then current tax year. If the successor is not an employer prior to the time of the transfer and simultaneously acquires the businesses of two (2) or more employers to whom different rates of employer contributions are applicable, it shall pay employer contributions at the highest rate applicable to those predecessors from the date the transfers occurred until the end of the then current tax year.

(ii) In all cases the rate of employer contributions applicable to the successor for each tax year beginning with the tax year commencing next after the transfer shall be computed on the basis of the combined payroll records of the successor and of the predecessor or predecessors. A successor shall be deemed to be an eligible employer if its experience combined with that of its predecessors meets the requirements of § 28-43-1(3). As used in this section, “successor” means the employing unit to whom a transfer as provided in this section is made, and “predecessor” means the employer making the transfer and may, if the context so requires, be construed as referring only to the separate establishment transferred in case of the transfer of a separate establishment.

(2) A successor to any portion of the business of its predecessor shall have its rate determined based on its own unemployment experience combined with that portion of the predecessor’s unemployment experience attributable to the share of the trade or business transferred to the successor in the following manner:

(i) The total payroll of the employees on the predecessor’s payroll during the last completed calendar quarter prior to the date of the transfer who are also on the payroll of the successor when the transfer takes effect shall be divided by the predecessor’s total payroll during the last completed calendar quarter prior to the date of the transfer, and that percentage shall be applied to the experience rating balances and payroll of the predecessor as of the end of the experience year used to determine the contribution rate for the tax year in effect at the date of transfer. The resulting amounts shall be subtracted from the experience rating balances and payroll of the predecessor. The predecessor’s remaining experience rating balances and payroll shall be used to determine its contribution rate for the new tax year or for the remainder of the current tax year, whichever is applicable, effective on the first day of the calendar quarter following the date of the transfer; provided, that if the date of the transfer is the first day of the calendar quarter, then the new contribution rate shall take effect on the date of the transfer.

(ii) The balances subtracted from the predecessor’s account in subsection (a)(2)(i) of this section shall be combined with the experience rating balances and payroll of the successor as of the end of the experience year used to determine the contribution rate for the tax year in effect at the date of transfer. Those combined balances shall be used to determine the contribution rate for the successor for the new tax year or for the remainder of the current tax year, whichever is applicable, effective on the first day of the calendar quarter following the date of the transfer; provided, that if the date of the transfer is the first day of the calendar quarter then the new contribution rate shall take effect on the date of the transfer. For successors in business for less than one experience year, their contribution rate for the new tax year or for the remainder of the current tax year, whichever is applicable, shall be computed based on the transferred experience rating balances and payroll of the predecessor and shall take effect on the first day of the calendar quarter following the date of the transfer; provided, that if the date of the transfer is the first day of the calendar quarter then the new contribution rate shall take effect on the date of the transfer.

(b) Any determination of the director under this section shall be final unless an appeal from it is filed by the aggrieved party within fifteen (15) days from the date that notice is mailed to the last known address of that party. All appeals shall follow the provision of § 28-43-13.