A.B. 21
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ASSEMBLY BILL NO. 21–COMMITTEE
ON COMMERCE AND LABOR
(ON BEHALF OF THE EMPLOYMENT SECURITY
DIVISION OF THE DEPARTMENT OF
EMPLOYMENT, TRAINING AND REHABILITATION)
PREFILED NOVEMBER 7, 2024
____________
Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions relating to unemployment
compensation. (BDR 53-308)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to unemployment compensation; eliminating
provisions requiring the Administrator of the Employment
Security Division of the Department of Employment,
Training and Rehabilitation to annually perform certain
calculations to determine certain information relating to
the solvency of the Unemployment Compensation Fund;
revising the amount of certain money that is required to
be annually transferred from the Unemployment
Compensation Administration Fund to the Unemployment
Compensation Fund; and providing other matters properly
relating thereto.
Legislative Counsel’s Digest:
The Unemployment Compensation Law, in general: (1) requires employers to 1
pay contributions into the Unemployment Compensation Fund at a certain rate of 2
the wages paid by the employer for employment; and (2) makes persons who have 3
become unemployed and comply with certain requirements eligible for benefits 4
from the Unemployment Compensation Fund in an amount based on the person’s 5
previous wages for employment. (Chapter 612 of NRS) Section 1 of this bill 6
eliminates provisions requiring the Administrator of the Employment Security 7
Division of the Department of Employment, Training and Rehabilitation, on or 8
before September 30 of each year, to perform certain calculations to determine 9
certain information relating to the solvency of the Unemployment Compensation 10
Fund. (NRS 612.550) 11
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Existing law requires, with certain exceptions, each employer to make 12
payments, at the rate of .05 percent of the wages the employer pays, into the 13
Unemployment Compensation Administration Fund. (NRS 612.606) Existing law 14
requires the money collected from such payments to be used for certain purposes 15
relating to the employment and training of unemployed persons and persons 16
employed in this State. (NRS 612.606, 612.607) Under existing law, at the end of 17
each fiscal year, the State Controller is required to transfer into the Clearing 18
Account in the Unemployment Compensation Fund the amount by which the 19
unencumbered balance of the money collected from such payments exceeds the 20
amount of that money which the Legislature has authorized for expenditure during 21
the first 90 days of the succeeding fiscal year. (NRS 612.607) Section 2 of this bill 22
revises the amount of the required transfer to be the amount by which the 23
unencumbered balance of the money collected from such payments exceeds the 24
amount of that money which the Legislature has authorized for expenditure during 25
the first 180 days of the succeeding fiscal year. 26
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 612.550 is hereby amended to read as follows: 1
612.550 1. As used in this section: 2
(a) [“Average actual duration” means the number of weeks 3
obtained by dividing the number of weeks of benefits paid for weeks 4
of total unemployment in a consecutive 12-month period by the 5
number of first payments made in the same 12-month period. 6
(b)] “Average annual payroll” for each calendar year means the 7
annual average of total wages paid by an employer subject to 8
contributions for the 3 consecutive calendar years immediately 9
preceding the computation date. The average annual payroll for 10
employers first qualifying as eligible employers must be computed 11
on the total amount of wages paid, subject to contributions, for not 12
less than 10 consecutive quarters and not more than 12 consecutive 13
quarters ending on December 31, immediately preceding the 14
computation date. 15
[(c) “Beneficiary” means a person who has received a first 16
payment. 17
(d)] (b) “Computation date” for each calendar year means 18
June 30 of the preceding calendar year. 19
[(e) “Covered worker” means a person who has worked in 20
employment subject to this chapter. 21
(f) “First payment” means the first weekly unemployment 22
insurance benefit paid to a person in the person’s benefit year. 23
(g)] (c) “Reserve balance” means the excess, if any, of total 24
contributions paid by each employer over total benefit charges to 25
that employer’s experience rating record. 26
[(h)] (d) “Reserve ratio” means the percentage ratio that the 27
reserve balance bears to the average annual payroll. 28
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[(i)] (e) “Total contributions paid” means the total amount of 1
contributions, due on wages paid on or before the computation date, 2
paid by an employer not later than the last day of the second month 3
immediately following the computation date. 4
[(j) “Unemployment risk ratio” means the ratio obtained by 5
dividing the number of first payments issued in any consecutive 12-6
month period by the average monthly number of covered workers in 7
employment as shown on the records of the Division for the same 8
12-month period.] 9
2. The Administrator shall, as of the computation date for each 10
calendar year, classify employers in accordance with their actual 11
payrolls, contributions and benefit experience, and shall determine 12
for each employer the rate of contribution which applies to that 13
employer for each calendar year in order to reflect his or her 14
experience and classification. The contribution rate of an employer 15
may not be reduced below 2.95 percent, unless there have been 12 16
consecutive calendar quarters immediately preceding the 17
computation date throughout which the employer has been subject 18
to this chapter and his or her account as an employer could have 19
been charged with benefit payments, except that an employer who 20
has not been subject to the law for a sufficient period to meet this 21
requirement may qualify for a rate less than 2.95 percent if his or 22
her account has been chargeable throughout a lesser period not less 23
than the 10-consecutive-calendar-quarter period ending on the 24
computation date. 25
3. Any employer who qualifies under paragraph (b) of 26
subsection [9] 8 and receives the experience record of a predecessor 27
employer must be assigned the contribution rate of the predecessor. 28
4. Benefits paid to a person up to and including the 29
computation date must be charged against the records, for 30
experience rating, of the person’s base-period employers in the same 31
percentage relationship that wages reported by individual employers 32
represent to total wages reported by all base period employers, 33
except that: 34
(a) If one of the base period employers has paid 75 percent or 35
more of the wages paid to the person during the person’s base 36
period, and except as otherwise provided in NRS 612.551, the 37
benefits, less a proportion equal to the proportion of wages paid 38
during the base period by employers who make reimbursement in 39
lieu of contributions, must be charged to the records for experience 40
rating of that employer. The proportion of benefits paid which is 41
equal to the part of the wages of the claimant for the base period 42
paid by an employer who makes reimbursement must be charged to 43
the record of that employer. 44
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(b) No benefits paid to a multistate claimant based upon 1
entitlement to benefits in more than one state may be charged to the 2
experience rating record of any employer when no benefits would 3
have been payable except pursuant to NRS 612.295. 4
(c) Except for employers who have been given the right to make 5
reimbursement in lieu of contributions, extended benefits paid to a 6
person must not be charged against the accounts of the person’s 7
base-period employers. 8
5. The Administrator shall, as of the computation date for each 9
calendar year, compute the reserve ratio for each eligible employer 10
and shall classify those employers on the basis of their individual 11
reserve ratios. The contribution rate assigned to each eligible 12
employer for the calendar year must be determined by the range 13
within which the employer’s reserve ratio falls. The Administrator 14
shall, by regulation, prescribe the contribution rate schedule to apply 15
for each calendar year by designating the ranges of reserve ratios to 16
which must be assigned the various contribution rates provided in 17
subsection 6. The lowest contribution rate must be assigned to the 18
designated range of highest reserve ratios and each succeeding 19
higher contribution rate must be assigned to each succeeding 20
designated range of lower reserve ratios, except that, within the 21
limits possible, the differences between reserve ratio ranges must be 22
uniform. 23
6. Each employer eligible for a contribution rate based upon 24
experience and classified in accordance with this section must be 25
assigned a contribution rate by the Administrator for each calendar 26
year according to the following classes: 27
28
Class 1 ................................................................... 0.25 percent 29
Class 2 ................................................................... 0.55 percent 30
Class 3 ................................................................... 0.85 percent 31
Class 4 ................................................................... 1.15 percent 32
Class 5 ................................................................... 1.45 percent 33
Class 6 ................................................................... 1.75 percent 34
Class 7 ................................................................... 2.05 percent 35
Class 8 ................................................................... 2.35 percent 36
Class 9 ................................................................... 2.65 percent 37
Class 10 ................................................................. 2.95 percent 38
Class 11 ................................................................. 3.25 percent 39
Class 12 ................................................................. 3.55 percent 40
Class 13 ................................................................. 3.85 percent 41
Class 14 ................................................................. 4.15 percent 42
Class 15 ................................................................. 4.45 percent 43
Class 16 ................................................................. 4.75 percent 44
Class 17 ................................................................. 5.05 percent 45
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Class 18 ................................................................. 5.40 percent 1
2
7. [On September 30 of each year, the Administrator shall 3
determine: 4
(a) The highest of the unemployment risk ratios experienced in 5
the 109 consecutive 12-month periods in the 10 years ending on 6
March 31; 7
(b) The potential annual number of beneficiaries found by 8
multiplying the highest unemployment risk ratio by the average 9
monthly number of covered workers in employment as shown on 10
the records of the Division for the 12 months ending on March 31; 11
(c) The potential annual number of weeks of benefits payable 12
found by multiplying the potential number of beneficiaries by the 13
highest average actual duration experienced in the 109 consecutive 14
12-month periods in the 10 years ending on September 30; and 15
(d) The potential maximum annual benefits payable found by 16
multiplying the potential annual number of weeks of benefits 17
payable by the average payment made to beneficiaries for weeks of 18
total unemployment in the 12 months ending on September 30. 19
8.] The Administrator shall issue an individual statement, 20
itemizing benefits charged during the 12-month period ending on 21
the computation date, total benefit charges, total contributions paid, 22
reserve balance and the rate of contributions to apply for that 23
calendar year, for each employer whose account is in active status 24
on the records of the Division on January 1 of each year and whose 25
account is chargeable with benefit payments on the computation 26
date of that year. 27
[9.] 8. If an employer transfers its trade or business, or a 28
portion thereof, to another employer: 29
(a) And there is substantially common ownership, management 30
or control of the employers, the experience record attributable to the 31
transferred trade or business must be transferred to the employer to 32
whom the trade or business is transferred. The rates of both 33
employers must be recalculated, and the recalculated rates become 34
effective on the date of the transfer of the trade or business. If the 35
Administrator determines, following the transfer of the experience 36
record pursuant to this paragraph, that the sole or primary purpose 37
of the transfer of the trade or business was to obtain a reduced 38
liability for contributions, the Administrator shall combine the 39
experience rating records of the employers involved into a single 40
account and assign a single rate to the account. 41
(b) And there is no substantially common ownership, 42
management or control of the employers, the experience record of 43
an employer may be transferred to a successor employer as of the 44
effective date of the change of ownership if: 45
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(1) The successor employer acquires the entire or a severable 1
and distinct portion of the business, or substantially all of the assets, 2
of the employer; 3
(2) The successor employer notifies the Division of the 4
acquisition in writing within 90 days after the date of the 5
acquisition; 6
(3) The employer and successor employer submit a joint 7
application to the Administrator requesting the transfer; and 8
(4) The joint application is approved by the Administrator. 9
The joint application must be submitted within 1 year after the 10
date of issuance by the Division of official notice of eligibility to 11
transfer. 12
(c) Except as otherwise provided in paragraph (a), a transfer of 13
the experience record must not be completed if the Administrator 14
determines that the acquisition was effected solely or primarily to 15
obtain a more favorable contribution rate. 16
(d) Any liability to the Division for unpaid contributions, 17
interest or forfeit attributable to the transferred trade or business 18
must be transferred to the successor employer. The percentage of 19
liability transferred must be the same as the percentage of the 20
experience record transferred. 21
[10.] 9. Whenever an employer has paid no wages in 22
employment for 8 consecutive calendar quarters following the last 23
calendar quarter in which the employer paid wages for employment, 24
the Administrator shall terminate the employer’s experience rating 25
account, and the account must not thereafter be used in any rate 26
computation. 27
[11.] 10. The Administrator may adopt reasonable accounting 28
methods to account for those employers which are in a category for 29
providing reimbursement in lieu of contributions. 30
[12.] 11. To the extent allowed by federal law, the 31
Administrator may, by regulation, suspend, modify, amend or waive 32
any requirement of this section for the duration of a state of 33
emergency or declaration of disaster proclaimed pursuant to NRS 34
414.070 and for any additional period of time during which the 35
emergency or disaster directly affects the requirement of this section 36
if: 37
(a) The Administrator determines the action is: 38
(1) In the best interest of the Division, this State or the 39
general health, safety and welfare of the citizens of this State; or 40
(2) Necessary to comply with instructions received from the 41
Department of Labor; and 42
(b) The action of the Administrator is approved by the 43
Governor. 44
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Sec. 2. NRS 612.607 is hereby amended to read as follows: 1
612.607 1. All payments collected pursuant to NRS 612.606 2
must be deposited in the Unemployment Compensation 3
Administration Fund. At the end of each fiscal year, the 4
State Controller shall transfer to the Clearing Account in 5
the Unemployment Compensation Fund the amount by which the 6
unencumbered balance of the money deposited in the 7
Unemployment Compensation Administration Fund pursuant to this 8
subsection exceeds the amount of that money which the Legislature 9
has authorized for expenditure during the first [90] 180 days of the 10
succeeding fiscal year. 11
2. Except for money transferred from the Unemployment 12
Compensation Administration Fund pursuant to subsection 1, the 13
Administrator may only expend the money collected for the 14
employment and training of unemployed persons and persons 15
employed in this State to: 16
(a) Establish and administer an employment training program 17
which must foster job creation, minimize unemployment costs of 18
employers and meet the needs of employers for skilled workers by 19
providing training to unemployed persons. 20
(b) Establish or provide support for job training programs in the 21
public and private sectors for training, retraining or improving the 22
skills of persons employed in this State. 23
(c) Establish a program to provide grants of money to a 24
nonprofit private entity to be used to make loans of money to 25
veterans and senior citizens to start small businesses. The 26
Administrator shall adopt regulations establishing criteria and 27
standards relating to the eligibility for and use of any grants made 28
pursuant to this paragraph. 29
(d) Pay the costs of the collection of payments required pursuant 30
to NRS 612.606. 31
3. The money used for the program for the employment and 32
training of unemployed persons and persons employed in this State 33
must supplement and not displace money available through existing 34
employment training programs conducted by any employer or 35
public agency and must not replace, parallel, supplant, compete with 36
or duplicate in any way existing apprenticeship programs approved 37
by the State Apprenticeship Council. 38
4. As used in this section: 39
(a) “Senior citizen” means a person who is domiciled in this 40
State and is 62 years of age or older. 41
(b) “Small business” means a business conducted for profit 42
which: 43
(1) Employs 50 or fewer full-time employees; and 44
(2) Has gross annual sales of less than $5,000,000. 45
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Sec. 3. This act becomes effective upon passage and approval. 1
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