| 11 | 9 | | 7 |
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| 12 | 10 | | For An Act To Be Entitled 8 |
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| 13 | 11 | | AN ACT TO DECREASE THE BASE CONTRIBUTION RATE; TO 9 |
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| 14 | 12 | | INCREASE THE ADMINISTRATIVE ASSESSMENT RATE; TO 10 |
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| 15 | 13 | | INCREASE FUNDING FOR THE SKILLED WORKFORCE IN THIS 11 |
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| 16 | 14 | | STATE; TO AMEND THE DIVISION OF WORKFORCE SERVICES 12 |
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| 17 | 15 | | TRAINING TRUST FUND; AND FOR OTHER PURPOSES. 13 |
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| 18 | 16 | | 14 |
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| 19 | 17 | | 15 |
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| 20 | 18 | | Subtitle 16 |
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| 21 | 19 | | TO DECREASE THE BASE CONTRIBUTION RATE; 17 |
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| 22 | 20 | | TO INCREASE THE ADMINISTRATIVE 18 |
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| 23 | 21 | | ASSESSMENT RATE; TO INCREASE FUNDING FOR 19 |
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| 24 | 22 | | THE SKILLED WORKFORCE IN THIS STATE; AND 20 |
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| 25 | 23 | | TO AMEND THE DIVISION OF WORKFORCE 21 |
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| 26 | 24 | | SERVICES TRAINING TRUST FUND. 22 |
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| 27 | 25 | | 23 |
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| 28 | 26 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24 |
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| 29 | 27 | | 25 |
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| 30 | 28 | | SECTION 1. Arkansas Code § 11-10-704(c), concerning contribution rates 26 |
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| 31 | 29 | | of each employer, is amended to read as follows: 27 |
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| 32 | 30 | | (c)(1) The director shall determine the contribution rates of each 28 |
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| 33 | 31 | | employer according to the requirements of this section and § 11 -10-705. 29 |
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| 34 | 32 | | (2)(A) For any calendar year beginning on or after January 1, 30 |
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| 35 | 33 | | 2024, each employer's rate shall be one and nine -tenths percent (1.9%) except 31 |
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| 36 | 34 | | as otherwise provided in this subchapter. 32 |
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| 37 | 35 | | (B)(i)(a) An employer's rate shall not be less than one 33 |
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| 38 | 36 | | and nine-tenths percent (1.9%) unless and until there have been three (3) 34 |
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| 39 | 37 | | years immediately preceding the computation date throughout which an 35 |
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| 45 | 41 | | eligible. 1 |
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| 46 | 42 | | (b) Provided, however, an employer who, at the 2 |
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| 47 | 43 | | time of establishing an account, is in business in another state or states 3 |
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| 48 | 44 | | and who is not currently doing business in Arkansas may elect to receive a 4 |
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| 49 | 45 | | beginning contribution rate of one and nine -tenths percent (1.9%) or a 5 |
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| 50 | 46 | | contribution rate based on the rate schedule in § 11 -10-705(b)(1), whichever 6 |
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| 51 | 47 | | is lower, but in no event less than one percent (1%), provided: 7 |
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| 52 | 48 | | (1) The employer has been in operation 8 |
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| 53 | 49 | | in the other state or states for at least three (3) years immediately 9 |
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| 54 | 50 | | preceding the date of becoming a liable employer in Arkansas, throughout 10 |
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| 55 | 51 | | which an individual in the employer's employ could have received benefits, if 11 |
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| 56 | 52 | | eligible; 12 |
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| 57 | 53 | | (2) The employer must provide the 13 |
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| 58 | 54 | | authenticated account history from information accumulated from operations in 14 |
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| 59 | 55 | | the other state or states to compute a current Arkansas rate; and 15 |
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| 60 | 56 | | (3) The employer's business operations 16 |
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| 61 | 57 | | established in Arkansas are of the same nature as conducted in the other 17 |
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| 62 | 58 | | state or states, as defined by the North American Industry Classification 18 |
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| 63 | 59 | | System. 19 |
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| 64 | 60 | | (ii)(a) The election authorized in subdivision 20 |
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| 65 | 61 | | (c)(2)(B)(i) of this section must be made in writing within thirty (30) days 21 |
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| 66 | 62 | | after receiving notice of Arkansas liability. 22 |
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| 67 | 63 | | (b) A one-and-nine-tenths-percent rate 23 |
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| 68 | 64 | | will be assigned unless a timely election has been made. 24 |
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| 69 | 65 | | (iii)(a) If the election is timely made, the 25 |
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| 70 | 66 | | employer's account will receive the rate elected for the remainder of that 26 |
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| 71 | 67 | | rate year. 27 |
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| 72 | 68 | | (b) The rate assigned for the next and 28 |
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| 73 | 69 | | subsequent years will be determined by the condition of the account on the 29 |
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| 74 | 70 | | computation date. 30 |
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| 75 | 71 | | (C) However, any employer having no covered employment 31 |
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| 76 | 72 | | under this chapter for any calendar year shall have a rate equal to his or 32 |
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| 77 | 73 | | her most recently determined contribution rate until the employer has one (1) 33 |
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| 78 | 74 | | full year of benefit risk experience immediately preceding the computation 34 |
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| 79 | 75 | | date. 35 |
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| 85 | 79 | | 2026, each employer's rate shall be one and eighth -tenths percent (1.8%) 1 |
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| 86 | 80 | | except as otherwise provided in this subchapter. 2 |
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| 87 | 81 | | (B)(i)(a) An employer's rate shall not be less than one 3 |
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| 88 | 82 | | and eighth-tenths percent (1.8%) unless and until there have been three (3) 4 |
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| 89 | 83 | | years immediately preceding the computation date throughout which an 5 |
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| 90 | 84 | | individual in the employer's employ could have received benefits, if 6 |
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| 91 | 85 | | eligible. 7 |
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| 92 | 86 | | (b) Provided, however, an employer who, at the 8 |
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| 93 | 87 | | time of establishing an account, is in business in another state or states 9 |
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| 94 | 88 | | and who is not currently doing business in Arkansas may elect to receive a 10 |
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| 95 | 89 | | beginning contribution rate of one and eighth -tenths percent (1.8%) or a 11 |
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| 96 | 90 | | contribution rate based on the rate schedule in § 11 -10-705(b)(1), whichever 12 |
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| 97 | 91 | | is lower, but in no event less than one percent (1%), provided: 13 |
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| 98 | 92 | | (1) The employer has been in operation 14 |
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| 99 | 93 | | in the other state or states for at least three (3) years immediately 15 |
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| 100 | 94 | | preceding the date of becoming a liable employer in Arkansas, throughout 16 |
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| 101 | 95 | | which an individual in the employer's employ could have received benefits, if 17 |
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| 102 | 96 | | eligible; 18 |
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| 103 | 97 | | (2) The employer must provide the 19 |
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| 104 | 98 | | authenticated account history from information accumulated from operations in 20 |
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| 105 | 99 | | the other state or states to compute a current Arkansas rate; and 21 |
|---|
| 106 | 100 | | (3) The employer's business operations 22 |
|---|
| 107 | 101 | | established in Arkansas are of the same nature as conducted in the other 23 |
|---|
| 108 | 102 | | state or states, as defined by the North American Industry Classification 24 |
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| 109 | 103 | | System. 25 |
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| 110 | 104 | | (ii)(a) The election authorized in subdivision 26 |
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| 111 | 105 | | (c)(3)(B)(i) of this section must be made in writing within thirty (30) days 27 |
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| 112 | 106 | | after receiving notice of Arkansas liability. 28 |
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| 113 | 107 | | (b) A one-and-eighth-tenths-percent (1.8%) 29 |
|---|
| 114 | 108 | | rate will be assigned unless a timely election has been made. 30 |
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| 115 | 109 | | (iii)(a) If the election is timely made, the 31 |
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| 116 | 110 | | employer's account will receive the rate elected for the remainder of that 32 |
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| 117 | 111 | | rate year. 33 |
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| 118 | 112 | | (b) The rate assigned for the next and 34 |
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| 119 | 113 | | subsequent years will be determined by the condition of the account on the 35 |
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| 125 | 117 | | (C) However, an employer having no covered employment 1 |
|---|
| 126 | 118 | | under this chapter for any calendar year shall have a rate equal to his or 2 |
|---|
| 127 | 119 | | her most recently determined contribution rate until the employer has one (1) 3 |
|---|
| 128 | 120 | | full year of benefit risk experience immediately preceding the computation 4 |
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| 129 | 121 | | date. 5 |
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| 130 | 122 | | (4)(A) Notwithstanding any other provisions of §§ 11 -10-701 — 6 |
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| 131 | 123 | | 11-10-715, if the director determines that an employer has willfully 7 |
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| 132 | 124 | | submitted false information that is material with respect to the employment 8 |
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| 133 | 125 | | or separation from employment of any claimant, employee, or former employee, 9 |
|---|
| 134 | 126 | | for the purpose of preventing regular benefit charges to the employer's 10 |
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| 135 | 127 | | account, the employer shall be assessed a penalty equivalent to twice the 11 |
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| 136 | 128 | | amount of the claimant's maximum potential benefit amount. 12 |
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| 137 | 129 | | (B) This penalty shall be charged against the employer's 13 |
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| 138 | 130 | | account for experience rating purposes, regardless of whether or not the 14 |
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| 139 | 131 | | employer is a base-period employer and irrespective of the identity or number 15 |
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| 140 | 132 | | of the base-period employer. 16 |
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| 141 | 133 | | (4)(5) An employer who changes from reimbursement to the 17 |
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| 142 | 134 | | contributory method of financing shall be considered a new or newly covered 18 |
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| 143 | 135 | | employer and can be entitled to an experience rate only when the new or newly 19 |
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| 144 | 136 | | covered employer has met the requirements of this subsection. 20 |
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| 145 | 137 | | (5)(6) Each employer's rate beginning January 1 for each twelve -21 |
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| 146 | 138 | | month period shall be determined on the basis of the employer's record 22 |
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| 147 | 139 | | through June 30 of the previous calendar year. 23 |
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| 148 | 140 | | 24 |
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| 149 | 141 | | SECTION 2. Arkansas Code § 11 -10-705(b)(1)(B), concerning the reserve 25 |
|---|
| 150 | 142 | | ratio schedule table under the Workers' Compensation Law, is amended to read 26 |
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| 151 | 143 | | as follows: 27 |
|---|
| 152 | 144 | | (B) The reserve ratio in the following schedule is 28 |
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| 153 | 145 | | determined by dividing the difference in contributions paid and regular 29 |
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| 154 | 146 | | benefits charged by the annual taxable payroll: 30 |
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| 155 | 147 | | CONTRIBUTION RESERVE RATIO 31 |
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| 156 | 148 | | RATE 32 |
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| 157 | 149 | | 0.1%(0.0%) 9.95% or more 33 |
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| 158 | 150 | | 0.3%(0.2%) 9.35% but less than 9.95% 34 |
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| 159 | 151 | | 0.5%(0.4%) 8.85% but less than 9.35% 35 |
|---|
| 165 | 155 | | 1.2%(1.1%) 8.35% but less than 8.65% 1 |
|---|
| 166 | 156 | | 1.6%(1.5%) 7.95% but less than 8.35% 2 |
|---|
| 167 | 157 | | 2.0%(1.9%) 7.35% but less than 7.95% 3 |
|---|
| 168 | 158 | | 2.4%(2.3%) 6.75% but less than 7.35% 4 |
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| 169 | 159 | | 2.8%(2.7%) 5.45% but less than 6.75% 5 |
|---|
| 170 | 160 | | 3.2%(3.1%) 2.45% but less than 5.45% 6 |
|---|
| 171 | 161 | | 4.0%(3.9%) 1.35% but less than 2.45% 7 |
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| 172 | 162 | | 5.0%(4.9%) Less than 1.35% with a positive 8 |
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| 173 | 163 | | reserve balance 9 |
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| 174 | 164 | | 6.0%(5.9%) Less than 0.00% 10 |
|---|
| 175 | 165 | | 11 |
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| 176 | 166 | | SECTION 3. Arkansas Code § 11 -10-706 is amended to read as follows: 12 |
|---|
| 177 | 167 | | 11-10-706. Future rates — Administrative assessment. 13 |
|---|
| 178 | 168 | | (a)(1) Effective July 1, 2023, each employer shall be required to pay 14 |
|---|
| 179 | 169 | | an administrative assessment on wages paid by the employer with respect to 15 |
|---|
| 180 | 170 | | employment. 16 |
|---|
| 181 | 171 | | (2) This administrative assessment shall not be credited to the 17 |
|---|
| 182 | 172 | | separate account of each employer. 18 |
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| 183 | 173 | | (b)(1) For the period July 1, 2023, through June 30, 2024, the 19 |
|---|
| 184 | 174 | | administrative assessment shall be twelve and one -half hundredths of one 20 |
|---|
| 185 | 175 | | percent (0.125%). 21 |
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| 186 | 176 | | (2) For the period beginning on and after July 1, 2024, the 22 |
|---|
| 187 | 177 | | administrative assessment shall be one -tenth of one percent (0.1%). 23 |
|---|
| 188 | 178 | | (3) For the period beginning on and after January 1, 2026, the 24 |
|---|
| 189 | 179 | | administrative assessment shall be two -tenths of one percent (0.2%). 25 |
|---|
| 190 | 180 | | (c)(1) Each fiscal year, sixty percent (60%) of the proceeds of the 26 |
|---|
| 191 | 181 | | administrative assessment, up to six million dollars ($6,000,000), shall be 27 |
|---|
| 192 | 182 | | deposited and credited to the Division of Workforce Services Unemployment 28 |
|---|
| 193 | 183 | | Insurance Administration Fund, there to be used for personal services and 29 |
|---|
| 194 | 184 | | operating expenses of the unemployment insurance program necessary for the 30 |
|---|
| 195 | 185 | | proper administration of the Division of Workforce Services Law, § 11 -10-101 31 |
|---|
| 196 | 186 | | et seq., as determined by the Director of the Division of Workforce Services. 32 |
|---|
| 197 | 187 | | (2)(A) After collection of the proceeds of the administrative 33 |
|---|
| 198 | 188 | | assessment specified in subdivision (c)(1) of this section, only for the 34 |
|---|
| 199 | 189 | | period from July 1, 2023, through June 30, 2024, the remaining proceeds, if 35 |
|---|
| 205 | 193 | | Division of Workforce Services Unemployment Insurance Administration Fund, 1 |
|---|
| 206 | 194 | | there to be used solely for the purpose of modernizing information technology 2 |
|---|
| 207 | 195 | | systems and hardware utilized in the administration of the unemployment 3 |
|---|
| 208 | 196 | | insurance program. 4 |
|---|
| 209 | 197 | | (B) The maximum amount to be deposited and credited under 5 |
|---|
| 210 | 198 | | subdivision (c)(2)(A) of this section shall not exceed the difference between 6 |
|---|
| 211 | 199 | | thirty-five million dollars ($35,000,000) and the amounts deposited and 7 |
|---|
| 212 | 200 | | credited in previous state fiscal years to the Division of Workforce Services 8 |
|---|
| 213 | 201 | | Unemployment Insurance Administration Fund for the purpose of modernizing 9 |
|---|
| 214 | 202 | | information technology systems and hardware utilized in the administration of 10 |
|---|
| 215 | 203 | | the unemployment insurance program. 11 |
|---|
| 216 | 204 | | (3)(2) Each fiscal year, after collection of the proceeds of the 12 |
|---|
| 217 | 205 | | administrative assessment specified in subdivisions (c)(1) and (2) 13 |
|---|
| 218 | 206 | | subdivision (c)(1) of this section, the remaining proceeds, if any, of the 14 |
|---|
| 219 | 207 | | administrative assessment in an amount up to two million five hundred 15 |
|---|
| 220 | 208 | | thousand dollars ($2,500,000) shall be deposited and credited to the Division 16 |
|---|
| 221 | 209 | | of Workforce Services Training Trust Fund, there to be used for personal 17 |
|---|
| 222 | 210 | | services, operating expenses, construction, grants, and worker training. 18 |
|---|
| 223 | 211 | | (4) Each fiscal year, after collection of the proceeds of the 19 |
|---|
| 224 | 212 | | administrative assessment specified under subdivisions (c)(1) -(3) of this 20 |
|---|
| 225 | 213 | | section, the remaining proceeds, if any, of the administrative assessment 21 |
|---|
| 226 | 214 | | shall be deposited and credited to the Unemployment Compensation Fund. 22 |
|---|
| 227 | 215 | | (5)(3) The director shall report to the Legislative Council on a 23 |
|---|
| 228 | 216 | | quarterly basis as to any uses of the Division of Workforce Services Training 24 |
|---|
| 229 | 217 | | Trust Fund and the Division of Workforce Services Unemployment Insurance 25 |
|---|
| 230 | 218 | | Administration Fund. 26 |
|---|
| 231 | 219 | | 27 |
|---|
| 232 | 220 | | SECTION 4. Arkansas Code § 19 -5-1131(b)(2), concerning the uses of the 28 |
|---|
| 233 | 221 | | Division of Workforce Services Training Trust Fund, is amended to read as 29 |
|---|
| 234 | 222 | | follows: 30 |
|---|
| 235 | 223 | | (2) The fund shall be used for personal services, operating 31 |
|---|
| 236 | 224 | | expenses, construction, grants, and worker training under rules promulgated 32 |
|---|
| 237 | 225 | | by the Director of the Division of Workforce Services. 33 |
|---|
| 238 | 226 | | 34 |
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