Senate Bill No. 560
(By Senator Bowman)
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[Introduced February 13, 2006; referred to the Committee
on Finance.]
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A BILL to amend and reenact
§21A-1A-28
of the Code of West
Virginia, 1931, as amended, relating to the Unemployment
Compensation Fund generally; and providing a new method of
calculating the taxable wage base for unemployment
compensation at thirty-six percent of the state's average
annual wage.
Be it enacted by the Legislature of West Virginia:
That
§21A-1A-28
of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 1A. DEFINITIONS.
§21A-1A-28. Wages.
(a) "Wages" means all remuneration for personal service,
including commissions, gratuities customarily received by an
individual in the course of employment from persons other than the employing unit, as long as such gratuities equal or exceed an
amount of not less than twenty dollars each month and which are
required to be reported to the employer by the employee, bonuses,
and the cash value of all remuneration in any medium other than
cash except for agricultural labor and domestic service. The term
wages includes remuneration for service rendered to the state as a
member of the state National Guard or Air National Guard only when
serving on a temporary basis pursuant to a call made by the
Governor under sections one and two, article one-d, chapter fifteen
of this code.
(b) The term "wages" does not include:
(1) Until the thirty-first day of December, two thousand six,
that part of the remuneration which, after remuneration equal to
eight thousand dollars is paid during a calendar year to an
individual by an employer or his or her predecessor with respect to
employment during any calendar year, is paid to such that
individual by such the employer during such the calendar year
unless that part of the remuneration is subject to a tax under a
federal law imposing a tax against which credit may be taken for
contributions required to be paid into a State Unemployment Fund
and effective the first day of January, two thousand seven and
thereafter, the term "wages" does not mean that part of the
remuneration which, after remuneration equal to an amount
calculated as thirty-six percent of the state's average annual wage and then rounded to the nearest one hundred dollar, is paid during
a calendar year to an individual by an employer or his or her
predecessor with respect to employment during any calendar year, is
paid to the individual by the employer during the calendar year
unless that part of the remuneration is subject to a tax under
federal law imposing a tax against which credit may be taken for
contributions required to be paid into a state unemployment fund.
The average annual wage is computed on or before the thirtieth day
of September of the year immediately preceding the rate year and is
the total remuneration paid by employers as reported on
contribution reports on or before that date with respect to all
employment during the four consecutive calendar quarters ending on
the thirtieth day of June of that year divided by the average
monthly number of individuals performing services in employment
during the same four calendar quarters as reported on the
contribution reports. For the purposes of this section, the term
"employment" includes service constituting employment under any
unemployment compensation law of another state; or which as a
condition for full tax credit against the tax imposed by the
federal Unemployment Tax Act is required to be covered under this
chapter; and, except that for the purposes of sections one, ten,
eleven and thirteen, article six of this chapter, all remuneration
earned by an individual in employment shall be credited to the
individual and included in his or her computation of base period wages:
Provided, That the remuneration paid to an individual by an
employer with respect to employment in another state or other
states upon which contributions were required of and paid by such
employer under an unemployment compensation law of such other state
or states shall be included as a part of the remuneration equal to
the amounts of eight thousand dollars herein referred to. In
applying such limitation on the amount of remuneration that is
taxable, an employer shall be accorded the benefit of all or any
portion of such amount which may have been paid by its predecessor
or predecessors:
Provided, however, That if the definition of the
term "wages" as contained in Section 3306(b) of the Internal
Revenue Code of 1954, as amended, is amended to include
remuneration in excess of eight thousand dollars, paid to an
individual by an employer under the federal Unemployment Tax Act
during any calendar year, wages for the purposes of this definition
shall include remuneration paid in a calendar year to an individual
by an employer subject to this chapter or his or her predecessor
with respect to employment during any calendar year up to an amount
equal to the amount of remuneration taxable under the federal
Unemployment Tax Act;
(2) The amount of any payment made (including any amount paid
by an employer for insurance or annuities, or into a fund, to
provide for any such payment) to, or on behalf of, an individual in
its employ or any of his or her dependents, under a plan or system established by an employer which makes provision for individuals in
its employ generally (or for such individuals and their
dependents), or for a class or classes of such individuals (or for
a class or classes of such individuals and their dependents) on
account of: (A) Retirement; or (B) sickness or accident disability
payments made to an employee under an approved state workers'
compensation law; or (C) medical or hospitalization expenses in
connection with sickness or accident disability; or (D) death;
(3) Any payment made by an employer to an individual in its
employ (including any amount paid by an employer for insurance or
annuities, or into a fund, to provide for any such payment) on
account of retirement;
(4) Any payment made by an employer on account of sickness or
accident disability, or medical or hospitalization expenses in
connection with sickness or accident disability to, or on behalf
of, an individual in its employ after the expiration of six
calendar months following the last calendar month in which such
individual worked for such employer;
(5) Any payment made by an employer to, or on behalf of, an
individual in its employ or his or her beneficiary: (A) From or to
a trust described in Section 401(a) which is exempt from tax under
Section 501(a) of the federal Internal Revenue Code at the time of
such payments unless such payment is made to such individual as an
employee of the trust as remuneration for services rendered by such individual and not as a beneficiary of the trust; or (B) under or
to an annuity plan which, at the time of such payment, is a plan
described in Section 403(a) of the federal Internal Revenue Code;
(6) The payment by an employer of the tax imposed upon an
employer under Section 3101 of the federal Internal Revenue Code
with respect to remuneration paid to an employee for domestic
service in a private home or the employer of agricultural labor;
(7) Remuneration paid by an employer in any medium other than
cash to an individual in its employ for service not in the course
of the employer's trade or business;
(8) Any payment (other than vacation or sick pay) made by an
employer to an individual in its employ after the month in which he
or she attains the age of sixty-five, if he or she did not work for
the employer in the period for which such payment is made;
(9) Payments, not required under any contract of hire, made to
an individual with respect to his or her period of training or
service in the Armed Forces of the United States by an employer by
which such individual was formerly employed; and
(10) Vacation pay, severance pay or savings plans received by
an individual before or after becoming totally or partially
unemployed but earned prior to becoming totally or partially
unemployed: Provided, That the term totally or partially
unemployed does not include: (A) Employees who are on vacation by
reason of the request of the employees or their duly authorized agent, for a vacation at a specific time, and which request by the
employees or their agent is acceded to by their employer; (B)
employees who are on vacation by reason of the employer's request
provided they are so informed at least ninety days prior to such
vacation; or (C) employees who are on vacation by reason of the
employer's request where such vacation is in addition to the
regular vacation and the employer compensates such employee at a
rate equal to or exceeding their regular daily rate of pay during
the vacation period.
(c) The reasonable cash value of remuneration in any medium
other than cash shall be estimated and determined in accordance
with rules prescribed by the commissioner, except for remuneration
other than cash for services performed in agricultural labor and
domestic service.
NOTE: the purpose of this bill change the method of
calculating the taxable wage base for unemployment compensation at
thirty-six percent of the states average annual wage. Currently
the annual taxable wage rate is $8,000.00.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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