(a) Contributions with respect to wages for employment accrue and are payable by an employer for each calendar year in which the employer is subject to this chapter. Contributions become due and shall be paid by an employer to the department for the fund in accordance with regulations adopted by the department. An employer may not deduct contributions payable by the employer from the wages of an employee.

(b) Contributions with respect to wages paid on or after January 1, 1955, for employment accrue and are payable by an individual who performs service in employment for each calendar year in which the services are subject to this chapter.

(c) The contributions required from each individual, in accordance with regulations adopted by the commissioner, are payable, shall be deducted from the individual's wages by the employer, and shall be held in trust by the employer for the commissioner until the employee contributions are required by regulation to be deposited with the commissioner. These funds are not subject to garnishment or attachment, and in the event of lien, judgment, or bankruptcy proceedings are not considered assets of the employer. An employer who fails to make the deductions from the wages of employees is liable to the commissioner for the payment of the required contributions. The contributions shall be collected from the employer in the manner provided for the collection of employer contributions.

(d) If an employer converts to personal use or misappropriates funds so held in trust, the employer shall pay to the commissioner for deposit in the clearing account the amount converted or misappropriated, together with a penalty equal to five times that amount but not less than $25. In addition, if the conversion or misappropriation is wilful, the employer is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $200, or by imprisonment for not more than 60 days, or by both.

(e) An employer shall maintain a record of the amount deducted from the wages of each employee and shall furnish a statement of the deductions to each employee at the times and in the manner the department prescribes by regulation. A deduction may not be made from those wages paid to an employee during a calendar year which are in excess of the wages subject to contributions under AS 23.20.175. If an employee in the employ of two or more employers earns wages in one calendar year totaling more than the wages subject to contributions or if an employer through error makes a deduction and erroneously pays contributions on wages of an employee in excess of the wages subject to contributions during a calendar year, the amount of deductions in excess of those required by this chapter shall be refunded to the employee by the department upon application for them in accordance with regulations adopted by the department. Application must be made during the calendar year after the calendar year in which the deductions are made.