SUCCESSOR AND PREDECESSOR EMPLOYERS - SPECIAL RULES ON TRANSFER OF RATES AND EXPERIENCE.

A. Notwithstanding any other provision of law, the following shall apply regarding assignments of rates and transfers of experience:

1. If an employer transfers its trade or business, or a separate and distinct establishment, or unit thereof, to another employer or an entity that does not meet the definition of an employer at the time of the transfer and there is substantially common ownership, management or control of the two employers or entities at the time of the transfer, then the experience rating account attributable to the transferred trade or business shall be combined with the experience rating account of the employer to whom such business is so transferred. The employer transferring its trade or business shall be the predecessor employer and the employer or entity acquiring the transferred trade or business shall be the successor employer. The successor employer shall acquire the experience rating account of the predecessor employer, including the predecessor's actual tax and benefit experience, annual payrolls and tax rate. The successor employer shall also become jointly and severally liable with the predecessor employer for all current or delinquent taxes, interest, penalties and fees owed to the Oklahoma Employment Security Commission by the predecessor employer. In the case of the transfer of a separate and distinct establishment or unit within the predecessor employer, the successor employer shall acquire that portion of the items identified above that relate to the establishment or unit acquired or its pro-rata share; and

2. Whenever a person who is not an employer under the Employment Security Act of 1980 at the time it acquires the trade or business of an employer, the experience rating account of the acquired business shall not be transferred to that person if the Commission finds that the person acquired the business solely or primarily for the purpose of obtaining a lower tax rate. Instead, the person shall be assigned a tax rate under Section 3-110.1 of this title. In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower tax rate, the Commission shall examine objective factors which may include the cost of acquiring the business, whether the person continued the business enterprise of the acquired business, how long the business enterprise was continued, or whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition.

B. 1. If a person knowingly violates or attempts to violate paragraph 1 or 2 of subsection A of this section or any other provision of the Employment Security Act of 1980 related to determining the assignment of the tax rate, or if a person knowingly advises another person in a way that results in a violation of such provision, the person shall be subject to the following penalties:

a.if the person is an employer, then the employer shall be assessed a penalty equal to ten percent (10%) of the actual taxes due in the calendar quarter in which the employer violated or attempted to violate the provisions of this section and a penalty equal to ten percent (10%) of the actual taxes due in each of the following three (3) calendar quarters. The funds in payment of this penalty shall be deposited in the Oklahoma Employment Security Commission Revolving Fund established under Section 4-901 of this title,

b.if the person is not an employer, the person shall be subject to a civil money penalty of at least One Hundred Dollars ($100.00) and not more than Five Thousand Dollars ($5,000.00) to be determined by the Assessment Board of the Oklahoma Employment Security Commission. Any fine shall be deposited in the Oklahoma Employment Security Commission Revolving Fund established under Section 4-901 of this title.

2. For purposes of this section, the term "knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.

3. For the purposes of this section, the term "violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation or willful nondisclosure.

4. In addition to the penalty imposed by paragraph 1 of this subsection, any person who violates the provisions of this section shall be guilty of a misdemeanor and may be imprisoned for up to one (1) year.

C. The Commission shall establish procedures to identify the transfer or acquisition of a business for purposes of this section.

D. For purposes of this section:

1. "Person" has the meaning given such term by 26 U.S.C., Section 7701(a)(1); and

2. "Trade or business" shall include the employer's workforce.

E. This section shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.

Added by Laws 2005, c. 182, § 8, eff. Nov. 1, 2005. Amended by Laws 2013, c. 71, § 10, eff. Nov. 1, 2013; Laws 2016, c. 287, § 10, eff. Nov. 1, 2016.