Public Act 094-0301
 
SB0411 Enrolled LRB094 09247 WGH 39481 b

    AN ACT concerning employment.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Unemployment Insurance Act is amended by
changing Sections 235, 1500, 1506.1, 1506.3, and 1507 and by
adding Section 1507.1 as follows:
 
    (820 ILCS 405/235)  (from Ch. 48, par. 345)
    Sec. 235. The term "wages" does not include:
    A. That part of the remuneration which, after remuneration
equal to $6,000 with respect to employment has been paid to an
individual by an employer during any calendar year after 1977
and before 1980, is paid to such individual by such employer
during such calendar year; and that part of the remuneration
which, after remuneration equal to $6,500 with respect to
employment has been paid to an individual by an employer during
each calendar year 1980 and 1981, is paid to such individual by
such employer during that calendar year; and that part of the
remuneration which, after remuneration equal to $7,000 with
respect to employment has been paid to an individual by an
employer during the calendar year 1982 is paid to such
individual by such employer during that calendar year.
    With respect to the first calendar quarter of 1983, the
term "wages" shall include only the remuneration paid to an
individual by an employer during such quarter with respect to
employment which does not exceed $7,000. With respect to the
three calendar quarters, beginning April 1, 1983, the term
"wages" shall include only the remuneration paid to an
individual by an employer during such period with respect to
employment which when added to the "wages" (as defined in the
preceding sentence) paid to such individual by such employer
during the first calendar quarter of 1983, does not exceed
$8,000.
    With respect to the calendar year 1984, the term "wages"
shall include only the remuneration paid to an individual by an
employer during that period with respect to employment which
does not exceed $8,000; with respect to calendar years 1985,
1986 and 1987, the term "wages" shall include only the
remuneration paid to such individual by such employer during
that calendar year with respect to employment which does not
exceed $8,500.
    With respect to the calendar years 1988 through 2003, the
term "wages" shall include only the remuneration paid to an
individual by an employer during that period with respect to
employment which does not exceed $9,000.
    With respect to the calendar year 2004, the term "wages"
shall include only the remuneration paid to an individual by an
employer during that period with respect to employment which
does not exceed $9,800. With respect to the calendar years 2005
through 2009, the term "wages" shall include only the
remuneration paid to an individual by an employer during that
period with respect to employment which does not exceed the
following amounts: $10,500 with respect to the calendar year
2005; $11,000 with respect to the calendar year 2006; $11,500
with respect to the calendar year 2007; $12,000 with respect to
the calendar year 2008; and $12,300 with respect to the
calendar year 2009.
    With respect to the calendar year 2010 and each calendar
year thereafter, the term "wages" shall include only the
remuneration paid to an individual by an employer during that
period with respect to employment which does not exceed the sum
of the wage base adjustment applicable to that year pursuant to
Section 1400.1, plus the maximum amount includable as "wages"
pursuant to this subsection with respect to the immediately
preceding calendar year. Notwithstanding any provision to the
contrary, the maximum amount includable as "wages" pursuant to
this Section shall not be less than $12,300 or greater than
$12,960 with respect to any calendar year after calendar year
2009.
    The remuneration paid to an individual by an employer with
respect to employment in another State or States, upon which
contributions were required of such employer under an
unemployment compensation law of such other State or States,
shall be included as a part of the remuneration herein referred
to. For the purposes of this subsection, any employing unit
which succeeds to the organization, trade, or business, or to
substantially all of the assets of another employing unit, or
to the organization, trade, or business, or to substantially
all of the assets of a distinct severable portion of another
employing unit, shall be treated as a single unit with its
predecessor for the calendar year in which such succession
occurs; , and any employing unit which is owned or controlled
by the same interests which own or control another employing
unit shall be treated as a single unit with the unit so owned
or controlled by such interests for any calendar year
throughout which such ownership or control exists; and, with
respect to any trade or business transfer subject to subsection
A of Section 1507.1, a transferee, as defined in subsection G
of Section 1507.1, shall be treated as a single unit with the
transferor, as defined in subsection G of Section 1507.1, for
the calendar year in which the transfer occurs. This subsection
applies only to Sections 1400, 1405A, and 1500.
    B. The amount of any payment (including any amount paid by
an employer for insurance or annuities, or into a fund, to
provide for any such payment), made to, or on behalf of, an
individual or any of his dependents under a plan or system
established by an employer which makes provision generally for
individuals performing services for him (or for such
individuals generally 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 (1) sickness
or accident disability (except those sickness or accident
disability payments which would be includable as "wages" in
Section 3306(b)(2)(A) of the Federal Internal Revenue Code of
1954, in effect on January 1, 1985, such includable payments to
be attributable in such manner as provided by Section 3306(b)
of the Federal Internal Revenue Code of 1954, in effect on
January 1, 1985), or (2) medical or hospitalization expenses in
connection with sickness or accident disability, or (3) death.
    C. Any payment made to, or on behalf of, an employee or his
beneficiary which would be excluded from "wages" by
subparagraph (A), (B), (C), (D), (E), (F) or (G), of Section
3306(b)(5) of the Federal Internal Revenue Code of 1954, in
effect on January 1, 1985.
    D. The amount of any payment on account of sickness or
accident disability, or medical or hospitalization expenses in
connection with sickness or accident disability, made by an
employer to, or on behalf of, an individual performing services
for him after the expiration of six calendar months following
the last calendar month in which the individual performed
services for such employer.
    E. Remuneration paid in any medium other than cash by an
employing unit to an individual for service in agricultural
labor as defined in Section 214.
    F. The amount of any supplemental payment made by an
employer to an individual performing services for him, other
than remuneration for services performed, under a shared work
plan approved by the Director pursuant to Section 407.1.
(Source: P.A. 93-634, eff. 1-1-04; 93-676, eff. 6-22-04.)
 
    (820 ILCS 405/1500)  (from Ch. 48, par. 570)
    Sec. 1500. Rate of contribution.
    A. For the six months' period beginning July 1, 1937, and
for each of the calendar years 1938 to 1959, inclusive, each
employer shall pay contributions on wages at the percentages
specified in or determined in accordance with the provisions of
this Act as amended and in effect on July 11, 1957.
    B. For the calendar years 1960 through 1983, each employer
shall pay contributions equal to 2.7 percent with respect to
wages for insured work paid during each such calendar year,
except that the contribution rate of each employer who has
incurred liability for the payment of contributions within each
of the three calendar years immediately preceding the calendar
year for which a rate is being determined, shall be determined
as provided in Sections 1501 to 1507, inclusive.
    For the calendar year 1984 and each calendar year
thereafter, each employer shall pay contributions at a
percentage rate equal to the greatest of 2.7%, or 2.7%
multiplied by the current adjusted State experience factor, as
determined for each calendar year by the Director in accordance
with the provisions of Sections 1504 and 1505, or the average
contribution rate for his major classification in the Standard
Industrial Code, or another classification sanctioned by the
United States Department of Labor and prescribed by the
Director by rule, with respect to wages for insured work paid
during such year. The Director of Employment Security shall
determine for calendar year 1984 and each calendar year
thereafter by a method pursuant to adopted rules each
individual employer's industrial code and the average
contribution rate for each major classification in the Standard
Industrial Code, or each other classification sanctioned by the
United States Department of Labor and prescribed by the
Director by rule. Notwithstanding the preceding provisions of
this paragraph, the contribution rate for calendar years 1984,
1985 and 1986 of each employer who has incurred liability for
the payment of contributions within each of the two calendar
years immediately preceding the calendar year for which a rate
is being determined, and the contribution rate for calendar
year 1987 and each calendar year thereafter of each employer
who has incurred liability for the payment of contributions
within each of the three calendar years immediately preceding
the calendar year for which a rate is being determined shall be
determined as provided in Sections 1501 to 1507.1 1507,
inclusive. Provided, however, that the contribution rate for
calendar years 1989 and 1990 of each employer who has had
experience with the risk of unemployment for at least 13
consecutive months ending June 30 of the preceding calendar
year shall be a rate determined in accordance with this Section
or a rate determined as if it had been calculated in accordance
with Sections 1501 through 1507, inclusive, whichever is
greater, except that for purposes of calculating the benefit
wage ratio as provided in Section 1503, such benefit wage ratio
shall be a percentage equal to the total of benefit wages for
the 12 consecutive calendar month period ending on the above
preceding June 30, divided by the total wages for insured work
subject to the payment of contributions under Sections 234, 235
and 245 for the same period and provided, further, however,
that the contribution rate for calendar year 1991 and for each
calendar year thereafter of each employer who has had
experience with the risk of unemployment for at least 13
consecutive months ending June 30 of the preceding calendar
year shall be a rate determined in accordance with this Section
or a rate determined as if it had been calculated in accordance
with Sections 1501 through 1507.1 1507, inclusive, whichever is
greater, except that for purposes of calculating the benefit
ratio as provided in Section 1503.1, such benefit ratio shall
be a percentage equal to the total of benefit charges for the
12 consecutive calendar month period ending on the above
preceding June 30, multiplied by the benefit conversion factor
applicable to such year, divided by the total wages for insured
work subject to the payment of contributions under Sections
234, 235 and 245 for the same period.
    C. Except as expressly provided in this Act, the provisions
of Sections 1500 to 1510, inclusive, do not apply to any
nonprofit organization for any period with respect to which it
does not incur liability for the payment of contributions by
reason of having elected to make payments in lieu of
contributions, or to any political subdivision or municipal
corporation for any period with respect to which it is not
subject to payments in lieu of contributions under the
provisions of paragraph 1 of Section 302C by reason of having
elected to make payments in lieu of contributions under
paragraph 2 of that Section or to any governmental entity
referred to in clause (B) of Section 211.1. Wages paid to an
individual which are subject to contributions under Section
1405 A, or on the basis of which benefits are paid to him which
are subject to payment in lieu of contributions under Sections
1403, 1404, or 1405 B, or under paragraph 2 of Section 302C,
shall not become benefit wages or benefit charges under the
provisions of Sections 1501 or 1501.1, respectively, except for
purposes of determining a rate of contribution for 1984 and
each calendar year thereafter for any governmental entity
referred to in clause (B) of Section 211.1 which does not elect
to make payments in lieu of contributions.
    D. If an employer's business is closed solely because of
the entrance of one or more of the owners, partners, officers,
or the majority stockholder into the armed forces of the United
States, or of any of its allies, or of the United Nations, and,
if the business is resumed within two years after the discharge
or release of such person or persons from active duty in the
armed forces, the employer will be deemed to have incurred
liability for the payment of contributions continuously
throughout such period. Such an employer, for the purposes of
Section 1506.1, will be deemed to have paid contributions upon
wages for insured work during the applicable period specified
in Section 1503 on or before the date designated therein,
provided that no wages became benefit wages during the
applicable period specified in Section 1503.
(Source: P.A. 91-342, eff. 1-1-00.)
 
    (820 ILCS 405/1506.1)  (from Ch. 48, par. 576.1)
    Sec. 1506.1. Determination of Employer's Contribution
Rate.
    A. The contribution rate for any calendar year prior to
1982 of each employer who has incurred liability for the
payment of contributions within each of the three calendar
years immediately preceding the calendar year for which a rate
is being determined shall be determined in accordance with the
provisions of this Act as amended and in effect on October 5,
1980.
    B. The contribution rate for calendar years 1982 and 1983
of each employer who has incurred liability for the payment of
contributions within each of the three calendar years
immediately preceding the calendar year for which a rate is
being determined shall be the product obtained by multiplying
the employer's benefit wage ratio for that calendar year by the
adjusted state experience factor for the same year, provided
that:
        1. No employer's contribution rate shall be lower than
    two-tenths of 1 percent or higher than 5.3%; and
        2. Intermediate contribution rates between such
    minimum and maximum rates shall be at one-tenth of 1
    percent intervals.
        3. If the product obtained as provided in this
    subsection is not an exact multiple of one-tenth of 1
    percent, it shall be increased or reduced, as the case may
    be, to the nearer multiple of one-tenth of 1 percent. If
    such product is equally near to two multiples of one-tenth
    of 1 percent, it shall be increased to the higher multiple
    of one-tenth of 1 percent. If such product is less than
    two-tenths of one percent, it shall be increased to
    two-tenths of 1 percent, and if greater than 5.3%, it shall
    be reduced to 5.3%.
    The contribution rate of each employer for whom wages
became benefit wages during the applicable period specified in
Section 1503, but who paid no contributions upon wages for
insured work during such period on or before the date
designated in Section 1503, shall be 5.3%.
    The contribution rate of each employer for whom no wages
became benefit wages during the applicable period specified in
Section 1503, and who paid no contributions upon wages for
insured work during such period on or before the date specified
in Section 1503, shall be 2.7 percent.
    Notwithstanding the other provisions of this Section, no
employer's contribution rate with respect to calendar years
1982 and 1983 shall exceed 2.7 percent of the wages for insured
work paid by him during any calendar quarter, if such wages
paid during such calendar quarter total less than $50,000.
    C. The contribution rate for calendar years 1984, 1985 and
1986 of each employer who has incurred liability for the
payment of contributions within each of the two calendar years
immediately preceding the calendar year for which a rate is
being determined shall be the product obtained by multiplying
the employer's benefit wage ratio for that calendar year by the
adjusted state experience factor for the same year, provided
that:
        1. An employer's minimum contribution rate shall be the
    greater of: .2%; or, the product obtained by multiplying
    .2% by the adjusted state experience factor for the
    applicable calendar year.
        2. An employer's maximum contribution rate shall be the
    greater of 5.5% or the product of 5.5% and the adjusted
    State experience factor for the applicable calendar year
    except that such maximum contribution rate shall not be
    higher than 6.3% for calendar year 1984, nor be higher than
    6.6% or lower than 6.4% for calendar year 1985, nor be
    higher than 6.7% or lower than 6.5% for calendar year 1986.
        3. If any product obtained in this subsection is not an
    exact multiple of one-tenth of one percent, it shall be
    increased or reduced, as the case may be to the nearer
    multiple of one-tenth of one percent. If such product is
    equally near to two multiples of one-tenth of one percent,
    it shall be increased to the higher multiple of one-tenth
    of one percent.
        4. Intermediate rates between such minimum and maximum
    rates shall be at one-tenth of one percent intervals.
    The contribution rate of each employer for whom wages
became benefit wages during the applicable period specified in
Section 1503, but who paid no contributions upon wages for
insured work during such period on or before the date
designated in Section 1503, shall be the maximum contribution
rate as determined by paragraph 2 of this subsection. The
contribution rate for each employer for whom no wages became
benefit wages during the applicable period on or before the
date specified in Section 1503, and who paid no contributions
upon wages for insured work during such period on or before the
date specified in Section 1503, shall be the greater of 2.7% or
2.7% times the then current adjusted state experience factor as
determined by the Director in accordance with the provisions of
Sections 1504 and 1505.
    Notwithstanding, the other provisions of this Section, no
employer's contribution rate with respect to the calendar year
1984 shall exceed 2.7 percent times the then current adjusted
state experience factor as determined by the Director in
accordance with the provisions of Sections 1504 and 1505 of the
wages for insured work paid by him during any calendar quarter,
if such wages paid during such calendar quarter total less than
$50,000.
    D. The contribution rate for calendar years 1987, 1988,
1989 and 1990 of each employer who has incurred liability for
the payment of contributions within each of the three calendar
years immediately preceding the calendar year for which a rate
is being determined shall be the product obtained by
multiplying the employer's benefit wage ratio for that calendar
year by the adjusted state experience factor for the same year,
provided, that:
        1. An employer's minimum contribution rate shall be the
    greater of .2% or the product obtained by multiplying .2%
    by the adjusted State experience factor for the applicable
    calendar year.
        2. An employer's maximum contribution rate shall be the
    greater of 5.5% or the product of 5.5% and the adjusted
    State experience factor for the calendar year 1987 except
    that such maximum contribution rate shall not be higher
    than 6.7% or lower than 6.5% and an employer's maximum
    contribution rate for 1988, 1989 and 1990 shall be the
    greater of 6.4% or the product of 6.4% and the adjusted
    State experience factor for the applicable calendar year.
        3. If any product obtained in this subsection is not an
    exact multiple of one-tenth of one percent, it shall be
    increased or reduced, as the case may be to the nearer
    multiple of one-tenth of 1 percent. If such product is
    equally near to two multiples of one-tenth of 1 percent, it
    shall be increased to the higher multiple of one-tenth of 1
    percent.
        4. Intermediate rates between such minimum and maximum
    rates shall be at one-tenth of 1 percent intervals.
    The contribution rate of each employer for whom wages
became benefit wages during the applicable period specified in
Section 1503, but who did not report wages for insured work
during such period, shall be the maximum contribution rate as
determined by paragraph 2 of this subsection. The contribution
rate for each employer for whom no wages became benefit wages
during the applicable period specified in Section 1503, and who
did not report wages for insured work during such period, shall
be the greater of 2.7% or 2.7% times the then current adjusted
State experience factor as determined by the Director in
accordance with the provisions of Sections 1504 and 1505.
    E. The contribution rate for calendar year 1991 and each
calendar year thereafter of each employer who has incurred
liability for the payment of contributions within each of the
three calendar years immediately preceding the calendar year
for which a rate is being determined shall be the product
obtained by multiplying the employer's benefit ratio defined by
Section 1503.1 for that calendar year by the adjusted state
experience factor for the same year, provided that:
        1. Except as otherwise provided in this paragraph, an
    employer's minimum contribution rate shall be the greater
    of 0.2% or the product obtained by multiplying 0.2% by the
    adjusted state experience factor for the applicable
    calendar year. An employer's minimum contribution rate
    shall be 0.1% for calendar year 1996.
        2. An employer's maximum contribution rate shall be the
    greater of 6.4% or the product of 6.4% and the adjusted
    state experience factor for the applicable calendar year.
        3. If any product obtained in this subsection is not an
    exact multiple of one-tenth of one percent, it shall be
    increased or reduced, as the case may be to the nearer
    multiple of one-tenth of one percent. If such product is
    equally near to two multiples of one-tenth of one percent,
    it shall be increased to the higher multiple of one-tenth
    of one percent.
        4. Intermediate rates between such minimum and maximum
    rates shall be at one-tenth of one percent intervals.
    The contribution rate of each employer for whom wages
became benefit wages during the applicable period specified in
Section 1503 or for whom benefit payments became benefit
charges during the applicable period specified in Section
1503.1, but who did not report wages for insured work during
such period, shall be the maximum contribution rate as
determined by paragraph 2 of this subsection. The contribution
rate for each employer for whom no wages became benefit wages
during the applicable period specified in Section 1503 or for
whom no benefit payments became benefit charges during the
applicable period specified in Section 1503.1, and who did not
report wages for insured work during such period, shall be the
greater of 2.7% or 2.7% times the then current adjusted state
experience factor as determined by the Director in accordance
with the provisions of Sections 1504 and 1505.
    F. Notwithstanding the other provisions of this Section,
and pursuant to Section 271 of the Tax Equity and Fiscal
Responsibility Act of 1982, as amended, no employer's
contribution rate with respect to calendar years 1985, 1986,
1987 and 1988 shall, for any calendar quarter during which the
wages paid by that employer are less than $50,000, exceed the
following: with respect to calendar year 1985, 3.7%; with
respect to calendar year 1986, 4.1%; with respect to calendar
year 1987, 4.5%; and with respect to calendar year 1988, 5.0%.
    G. Notwithstanding the other provisions of this Section, no
employer's contribution rate with respect to calendar year 1989
and each calendar year thereafter shall exceed 5.4% of the
wages for insured work paid by him during any calendar quarter,
if such wages paid during such calendar quarter total less than
$50,000, plus any applicable penalty contribution rate
calculated pursuant to subsection C of Section 1507.1.
(Source: P.A. 89-446, eff. 2-8-96.)
 
    (820 ILCS 405/1506.3)  (from Ch. 48, par. 576.3)
    Sec. 1506.3. Fund building rates - Temporary
Administrative Funding.
    A. Notwithstanding any other provision of this Act, the
following fund building rates shall be in effect for the
following calendar years:
    For each employer whose contribution rate for 1988, 1989,
1990, the first, third, and fourth quarters of 1991, 1992,
1993, 1994, 1995, and 1997 through 2003 would, in the absence
of this Section, be 0.2% or higher, a contribution rate which
is the sum of such rate and a fund building rate of 0.4%;
    For each employer whose contribution rate for the second
quarter of 1991 would, in the absence of this Section, be 0.2%
or higher, a contribution rate which is the sum of such rate
and 0.3%;
    For each employer whose contribution rate for 1996 would,
in the absence of this Section, be 0.1% or higher, a
contribution rate which is the sum of such rate and 0.4%;
     For each employer whose contribution rate for 2004 through
2009 would, in the absence of this Section, be 0.2% or higher,
a contribution rate which is the sum of such rate and the
following: a fund building rate of 0.7% for 2004; a fund
building rate of 0.9% for 2005; a fund building rate of 0.8%
for 2006 and 2007; a fund building rate of 0.6% for 2008; a
fund building rate of 0.4% for 2009.
     For each employer whose contribution rate for 2010 and any
calendar year thereafter would, in the absence of this Section,
be 0.2% or higher, a contribution rate which is the sum of such
rate and a fund building rate equal to the sum of the rate
adjustment applicable to that year pursuant to Section 1400.1,
plus the fund building rate in effect pursuant to this Section
for the immediately preceding calendar year. Notwithstanding
any provision to the contrary, the fund building rate in effect
for any calendar year after calendar year 2009 shall not be
less than 0.4% or greater than 0.55%.
    Notwithstanding the preceding paragraphs of this Section
or any other provision of this Act, except for the provisions
contained in Section 1500 pertaining to rates applicable to
employers classified under the Standard Industrial Code, or
another classification system sanctioned by the United States
Department of Labor and prescribed by the Director by rule, no
employer whose total wages for insured work paid by him during
any calendar quarter in 1988 and any calendar year thereafter
are less than $50,000 shall pay contributions at a rate with
respect to such quarter which exceeds the following: with
respect to calendar year 1988, 5%; with respect to 1989 and any
calendar year thereafter, 5.4%, plus any penalty contribution
rate calculated pursuant to subsection C of Section 1507.1.
    Notwithstanding the preceding paragraph of this Section,
or any other provision of this Act, no employer's contribution
rate with respect to calendar years 1993 through 1995 shall
exceed 5.4% if the employer ceased operations at an Illinois
manufacturing facility in 1991 and remained closed at that
facility during all of 1992, and the employer in 1993 commits
to invest at least $5,000,000 for the purpose of resuming
operations at that facility, and the employer rehires during
1993 at least 250 of the individuals employed by it at that
facility during the one year period prior to the cessation of
its operations, provided that, within 30 days after the
effective date of this amendatory Act of 1993, the employer
makes application to the Department to have the provisions of
this paragraph apply to it. The immediately preceding sentence
shall be null and void with respect to an employer which by
December 31, 1993 has not satisfied the rehiring requirement
specified by this paragraph or which by December 31, 1994 has
not made the investment specified by this paragraph. All
payments attributable to the fund building rate established
pursuant to this Section with respect to the fourth quarter of
calendar year 2003, the first quarter of calendar year 2004 and
any calendar quarter thereafter as of the close of which there
are either bond obligations outstanding pursuant to the
Illinois Unemployment Insurance Trust Fund Financing Act, or
bond obligations anticipated to be outstanding as of either or
both of the 2 immediately succeeding calendar quarters, shall
be directed for deposit into the Master Bond Fund.
Notwithstanding any other provision of this subsection, no fund
building rate shall be added to any penalty contribution rate
assessed pursuant to subsection C of Section 1507.1.
    B. Notwithstanding any other provision of this Act, for the
second quarter of 1991, the contribution rate of each employer
as determined in accordance with Sections 1500, 1506.1, and
subsection A of this Section shall be equal to the sum of such
rate and 0.1%; provided that this subsection shall not apply to
any employer whose rate computed under Section 1506.1 for such
quarter is between 5.1% and 5.3%, inclusive, and who qualifies
for the 5.4% rate ceiling imposed by the last paragraph of
subsection A for such quarter. All payments made pursuant to
this subsection shall be deposited in the Employment Security
Administrative Fund established under Section 2103.1 and used
for the administration of this Act.
    C. Payments received by the Director which are insufficient
to pay the total contributions due under the Act shall be first
applied to satisfy the amount due pursuant to subsection B.
    C-1. Payments received by the Director with respect to the
fourth quarter of calendar year 2003, the first quarter of
calendar year 2004 and any calendar quarter thereafter as of
the close of which there are either bond obligations
outstanding pursuant to the Illinois Unemployment Insurance
Trust Fund Financing Act, or bond obligations anticipated to be
outstanding as of either or both of the 2 immediately
succeeding calendar quarters, shall, to the extent they are
insufficient to pay the total amount due under the Act with
respect to the quarter, be first applied to satisfy the amount
due with respect to that quarter and attributable to the fund
building rate established pursuant to this Section.
Notwithstanding any other provision to the contrary, with
respect to an employer whose contribution rate with respect to
a quarter subject to this subsection would have exceeded 5.4%
but for the 5.4% rate ceiling imposed pursuant to subsection A,
the amount due from the employer with respect to that quarter
and attributable to the fund building rate established pursuant
to subsection A shall equal the amount, if any, by which the
amount due and attributable to the 5.4% rate exceeds the amount
that would have been due and attributable to the employer's
rate determined pursuant to Sections 1500 and 1506.1, without
regard to the fund building rate established pursuant to
subsection A.
    D. All provisions of this Act applicable to the collection
or refund of any contribution due under this Act shall be
applicable to the collection or refund of amounts due pursuant
to subsection B and amounts directed pursuant to this Section
for deposit into the Master Bond Fund to the extent they would
not otherwise be considered as contributions.
(Source: P.A. 93-634, eff. 1-1-04.)
 
    (820 ILCS 405/1507)  (from Ch. 48, par. 577)
    Sec. 1507. Contribution rates of successor and predecessor
employing units.
    A. Whenever any employing unit succeeds to substantially
all of the employing enterprises of another employing unit,
then in determining contribution rates for any calendar year,
the experience rating record of the predecessor prior to the
succession shall be transferred to the successor and thereafter
it shall not be treated as the experience rating record of the
predecessor, except as provided in subsection B. For the
purposes of this Section, such experience rating record shall
consist of all years during which liability for the payment of
contributions was incurred by the predecessor prior to the
succession, all benefit wages based upon wages paid by the
predecessor prior to the succession, all benefit charges based
on separations from, or reductions in work initiated by, the
predecessor prior to the succession, and all wages for insured
work paid by the predecessor prior to the succession. This
amendatory Act of the 93rd General Assembly is intended to be a
continuation of prior law.
    B. The provisions of this subsection shall be applicable
only to the determination of contribution rates for the
calendar year 1956 and for each calendar year thereafter.
Whenever any employing unit has succeeded to substantially all
of the employing enterprises of another employing unit, but the
predecessor employing unit has retained a distinct severable
portion of its employing enterprises or whenever any employing
unit has succeeded to a distinct severable portion which is
less than substantially all of the employing enterprises of
another employing unit, the successor employing unit shall
acquire the experience rating record attributable to the
portion to which it has succeeded, and the predecessor
employing unit shall retain the experience rating record
attributable to the portion which it has retained, if--
        1. It files a written application for such experience
    rating record which is joined in by the employing unit
    which is then entitled to such experience rating record;
    and
        2. The joint application contains such information as
    the Director shall by regulation prescribe which will show
    that such experience rating record is identifiable and
    segregable and, therefore, capable of being transferred;
    and
        3. The joint application is filed prior to whichever of
    the following dates is the latest: (a) July 1, 1956; (b)
    one year after the date of the succession; or (c) the date
    that the rate determination of the employing unit which has
    applied for such experience rating record has become final
    for the calendar year immediately following the calendar
    year in which the succession occurs. The filing of a timely
    joint application shall not affect any rate determination
    which has become final, as provided by Section 1509.
    If all of the foregoing requirements are met, then the
Director shall transfer such experience rating record to the
employing unit which has applied therefor, and it shall not be
treated as the experience rating record of the employing unit
which has joined in the application.
    Whenever any employing unit is reorganized into two or more
employing units, and any of such employing units are owned or
controlled by the same interests which owned or controlled the
predecessor prior to the reorganization, and the provisions of
this subsection become applicable thereto, then such
affiliated employing units during the period of their
affiliation shall be treated as a single employing unit for the
purpose of determining their rates of contributions.
    C. For the calendar year in which a succession occurs which
results in the total or partial transfer of a predecessor's
experience rating record, the contribution rates of the parties
thereto shall be determined in the following manner:
        1. If any of such parties had a contribution rate
    applicable to it for that calendar year, it shall continue
    with such contribution rate.
        2. If any successor had no contribution rate applicable
    to it for that calendar year, and only one predecessor is
    involved, then the contribution rate of the successor shall
    be the same as that of its predecessor.
        3. If any successor had no contribution rate applicable
    to it for that calendar year, and two or more predecessors
    are involved, then the contribution rate of the successor
    shall be computed, on the combined experience rating
    records of the predecessors or on the appropriate part of
    such records if any partial transfer is involved, as
    provided in Sections 1500 to 1507, inclusive.
        4. Notwithstanding the provisions of paragraphs 2 and 3
    of this subsection, if any succession occurs prior to the
    calendar year 1956 and the successor acquires part of the
    experience rating record of the predecessor as provided in
    subsection B of this Section, then the contribution rate of
    that successor for the calendar year in which such
    succession occurs shall be 2.7 percent.
    D. The provisions of this Section shall not be applicable
if the provisions of Section 1507.1 are applicable.
(Source: P.A. 93-634, eff. 1-1-04.)
 
    (820 ILCS 405/1507.1 new)
    Sec. 1507.1. Transfer of trade or business; contribution
rate. Notwithstanding any other provision of this Act:
    A.(1) If an individual or entity transfers its trade or
business, or a portion thereof, and, at the time of the
transfer, there is any substantial common ownership,
management, or control of the transferor and transferee, then
the experience rating records of the transferor and transferee
shall be combined for the purpose of determining their rates of
contribution. For purposes of this subsection, a transfer of
trade or business includes but is not limited to the transfer
of some or all of the transferor's workforce.
    (2) For the calendar year in which there occurs a transfer
to which paragraph (1) applies:
        (a) If the transferor or transferee had a contribution
    rate applicable to it for the calendar year, it shall
    continue with that contribution rate for the remainder of
    the calendar year.
        (b) If the transferee had no contribution rate
    applicable to it for the calendar year, then the
    contribution rate of the transferee shall be computed for
    the calendar year based on the experience rating record of
    the transferor or, where there is more than one transferor,
    the combined experience rating records of the transferors,
    subject to the 5.4% rate ceiling established pursuant to
    subsection G of Section 1506.1 and subsection A of Section
    1506.3.
    B. If any individual or entity that is not an employer
under this Act at the time of the acquisition acquires the
trade or business of an employing unit, the experience rating
record of the acquired business shall not be transferred to the
individual or entity if the Director finds that the individual
or entity acquired the business solely or primarily for the
purpose of obtaining a lower rate of contributions. Evidence
that a business was acquired solely or primarily for the
purpose of obtaining a lower rate of contributions includes but
is not necessarily limited to the following: the cost of
acquiring the business is low in relation to the individual's
or entity's overall operating costs subsequent to the
acquisition; the individual or entity discontinued the
business enterprise of the acquired business immediately or
shortly after the acquisition; or the individual or entity
hired a significant number of individuals for performance of
duties unrelated to the business activity conducted prior to
acquisition.
    C. An individual or entity to which subsection A applies
shall pay contributions with respect to each calendar year at a
rate consistent with that subsection, and an individual or
entity to which subsection B applies shall pay contributions
with respect to each calendar year at a rate consistent with
that subsection. If an individual or entity knowingly violates
or attempts to violate this subsection, the individual or
entity shall be subject to the following penalties:
        (1) If the individual or entity is an employer, then,
    in addition to the contribution rate that would otherwise
    be calculated (including any fund building rate provided
    for pursuant to Section 1506.3), the employer shall be
    assigned a penalty contribution rate equivalent to 50% of
    the contribution rate (including any fund building rate
    provided for pursuant to Section 1506.3), as calculated
    without regard to this subsection for the calendar year
    with respect to which the violation or attempted violation
    occurred and the immediately following calendar year. In
    the case of an employer whose contribution rate, as
    calculated without regard to this subsection or Section
    1506.3, equals or exceeds the maximum rate established
    pursuant to paragraph 2 of subsection E of Section 1506.1,
    the penalty rate shall equal 50% of the sum of that maximum
    rate and the fund building rate provided for pursuant to
    Section 1506.3. In the case of an employer whose
    contribution rate is subject to the 5.4% rate ceiling
    established pursuant to subsection G of Section 1506.1 and
    subsection A of Section 1506.3, the penalty rate shall
    equal 2.7%. If any product obtained pursuant to this
    subsection is not an exact multiple of one-tenth of 1%, it
    shall be increased or reduced, as the case may be, to the
    nearer multiple of one-tenth of 1%. If such product is
    equally near to 2 multiples of one-tenth of 1%, it shall be
    increased to the higher multiple of one-tenth of 1%. Any
    payment attributable to the penalty contribution rate
    shall be deposited into the clearing account.
        (2) If the individual or entity is not an employer, the
    individual or entity shall be subject to a penalty of
    $10,000 for each violation. Any penalty attributable to
    this paragraph (2) shall be deposited into the Special
    Administrative Account.
    D. An individual or entity shall not knowingly advise
another in a way that results in a violation of subsection C.
An individual or entity that violates this subsection shall be
subject to a penalty of $10,000 for each violation. Any such
penalty shall be deposited into the Special Administrative
Account.
    E. Any individual or entity that knowingly violates
subsection C or D shall be guilty of a Class B misdemeanor. In
the case of a corporation, the president, the secretary, and
the treasurer, and any other officer exercising corresponding
functions, shall each be subject to the aforesaid penalty for
knowingly violating subsection C or D.
    F. The Director shall establish procedures to identify the
transfer or acquisition of a trade or business for purposes of
this Section.
    G. For purposes of this Section:
        "Experience rating record" shall consist of years
    during which liability for the payment of contributions was
    incurred, all benefit charges incurred, and all wages paid
    for insured work, including but not limited to years,
    benefit charges, and wages attributed to an individual or
    entity pursuant to Section 1507 or subsection A.
        "Knowingly" means having actual knowledge of or acting
    with deliberate ignorance of or reckless disregard for the
    statutory provision involved.
        "Transferee" means any individual or entity to which
    the transferor transfers its trade or business or any
    portion thereof.
        "Transferor" means the individual or entity that
    transfers its trade or business or any portion thereof.
    H. 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. Insofar as it applies to the interpretation and
application of the term "substantial", as used in subsection A,
this subsection H is not intended to alter the meaning of
"substantially", as used in Section 1507 and construed by
precedential judicial opinion, or any comparable term as
elsewhere used in this Act.