§ 1321. Contributions; taxable wage base changes

(a) Payment of contributions. Contributions shall accrue and become payable by each employer for each calendar year in which he or she is subject to this chapter, with respect to wages paid for employment, as defined in subdivision 1301(6) of this title, occurring during such calendar year, except as otherwise provided in this section. The contributions shall become due and be payable at such time and in such installments as the Board prescribes.

(b) Base of contributions. Subsequent to December 31, 1982, the term “wages” shall not include that part of remuneration that, after remuneration equal to $8,000.00 has been paid in a calendar year to an individual by an employer with respect to employment during a 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. For the period January 1, 2010, through December 31, 2010, the term “wages” shall not include that part of remuneration that, after remuneration equal to $10,000.00 has been paid in a calendar year to an individual by an employer with respect to employment during a 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. The term “wages” shall not include that part of remuneration that, after remuneration equal to $13,000.00 on January 1, 2011, and $16,000.00 on January 1, 2012, has been paid in a calendar year to an individual by an employer with respect to employment during a 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. After January 1, 2012, whenever the Unemployment Compensation Fund has a positive balance and all advances made to the State Unemployment Compensation Fund pursuant to Title XII of the Social Security Act have been repaid as of June 1, the base of contribution amount shall be adjusted on January 1 of the following year by the same percentage as any increase in the State annual average wage as calculated by subsection 1338(g) of this title. When the unemployment contribution rate schedule established by subsection 1326(e) of this title is reduced to schedule III, the base of contribution amount shall be reduced by $2,000.00 on January 1 of the following year and shall be adjusted annually thereafter on January 1 of the following year by the same percentage as any increase in the State annual average wage as calculated by subsection 1338(g) of this title. When the unemployment contribution rate schedule established by subsection 1326(e) of this title is reduced to schedule I, the base of contribution amount shall be reduced by $2,000.00 on January 1 of the following year and shall be adjusted annually thereafter on January 1 of the following year by the same percentage as any increase in the State annual average wage as calculated by subsection 1338(g) of this title. For the purposes of this subsection:

(1) any employer who acquired the entire or a distinct and severable portion of the organization, trade, or business of an employer shall be treated as a single unit with its predecessor for the calendar year in which such acquisition occurs; and

(2) the term employment shall include service constituting employment under any unemployment compensation law of another state.

(c)(1) Financing benefits paid to employees of nonprofit organizations.

(A) Benefits paid to employees of nonprofit organizations shall be financed in accordance with the provisions of this subsection (c).

(B) As used in this subsection (c), “nonprofit organization” means an organization, or group of organizations, described in Section 501(c)(3) of the U.S. Internal Revenue Code that is exempt from income tax under Section 501(a) of the Internal Revenue Code.

(2) Liability for contributions and election of reimbursement. Any nonprofit organization that, pursuant to subdivision 1301(5)(B)(i) of this chapter, is or becomes subject to this chapter shall pay contributions under the provisions of this section unless it elects, in accordance with this subsection, to pay to the Commissioner for the Unemployment Insurance Trust Fund an amount equal to the amount of regular benefits and of one-half of the extended benefits paid that is attributable to service in the employ of the nonprofit organization to individuals for weeks of unemployment that begin during the effective period of the election.

(A) [Repealed.]

(B) Any nonprofit organization that becomes subject to this chapter may elect to become liable for payments in lieu of contributions for a period of not less than 12 months by filing a written notice of its election with the Commissioner not later than 30 days immediately following the date of the determination that the organization is subject to this chapter.

(C) Any nonprofit organization that makes an election in accordance with subdivision (B) of this subdivision (c)(2) shall continue to be liable for payments in lieu of contributions until it files with the Commissioner a written notice terminating its election not later than 30 days prior to the beginning of the calendar year for which the termination shall first be effective.

(D) Any nonprofit organization that has been paying contributions under this chapter may elect to become liable for payments in lieu of contributions by filing with the Commissioner not later than 30 days prior to the beginning of any calendar year a written notice of election to become liable for payments in lieu of contributions. An election under this subdivision (c)(2)(D) shall not be terminable by the organization for that year and the next year.

(E) The Commissioner may for good cause extend the period within which a notice of election, or a notice of termination, must be filed and may permit an election to be retroactive.

(F) The Commissioner, in accordance with any applicable rules adopted by the Board, shall notify each nonprofit organization of any determination that the Commissioner makes with regard to its status as an employer and the effective date of any election that the organization makes and of any termination of an election. The determinations shall be subject to reconsideration and to appeal and review in accordance with the provisions of section 1337a of this title.

(3) Reimbursement payments. Payments in lieu of contributions shall be made in accordance with the provisions of this subdivision, including either subdivision (A) or (B).

(A) At the end of each calendar quarter, or at the end of any other period as determined by the Commissioner, the Commissioner shall bill each nonprofit organization, or group of nonprofit organizations, that has elected to make payments in lieu of contributions for an amount equal to the full amount of regular benefits plus one-half of the amount of extended benefits paid during the quarter or other prescribed period that is attributable to service in the employ of the organization.

(B)(i) Each nonprofit organization that has elected payments in lieu of contributions may request permission to make payments as provided in this subdivision (c)(3)(B). Payment pursuant to the provisions of this subdivision (c)(3)(B) shall become effective upon approval of the Commissioner.

(ii) At the end of each calendar quarter, the Commissioner shall bill each nonprofit organization approved to make payments pursuant to the provisions of this subdivision (c)(3)(B) for an amount representing a percentage of its total payroll for the immediately preceding calendar year that the Commissioner determines to be appropriate based on the average benefit costs attributable to service in the employ of nonprofit organizations during the preceding calendar year. The Commissioner may determine a different rate for any organization that did not pay wages throughout the four calendar quarters of the preceding calendar year.

(iii) At the end of each calendar year, the Commissioner may modify the quarterly percentage of payroll thereafter payable by the nonprofit organization in order to minimize excess or insufficient payments.

(iv) At the end of each calendar year, the Commissioner shall determine whether the total of payments for the year made by a nonprofit organization is less than, or in excess of, the total amount of regular benefits plus one-half of the amount of extended benefits paid to individuals during the taxable year based on wages attributable to service in the employ of the organization. Each nonprofit organization whose total payments for the year are less than the amount determined shall be liable for payment of the unpaid balance to the Trust Fund in accordance with subdivision (C) of this subdivision (c)(3). If the total payments exceed the amount so determined for the taxable year, all or a part of the excess shall, at the election of the nonprofit organization, be refunded from the Trust Fund or retained in the Trust Fund as part of the payments that may be required for the next calendar year.

(C) Payment of any bill rendered under subdivision (2) of this subsection (c) or this subdivision (c)(3) shall be made not later than 30 days after the bill is mailed to the last known address of the nonprofit organization or is otherwise delivered to it unless there has been an application for redetermination by the Commissioner or a petition for hearing before a referee in accordance with subdivision (E) of this subdivision (c)(3).

(D) Payments made by any nonprofit organization under the provisions of this section shall not be deducted or deductible, in whole or in part, from the remuneration of individuals in the employ of the organization.

(E)(i) The amount due specified in any bill from the Commissioner shall be conclusive on the organization unless, not later than 30 days after the date of the bill, the organization files an application for reconsideration by the Commissioner, or a petition for a hearing before a referee, setting forth the grounds for the application or petition.

(ii) The Commissioner shall promptly review and reconsider the amount due specified in the bill and shall thereafter issue a redetermination in any case in which an application for redetermination has been filed. Any such redetermination shall be conclusive on the organization unless, not later than 30 days after the date of the redetermination, the organization files a petition for a hearing before a referee setting forth the grounds for the petition.

(iii) Proceedings on the petition for a hearing before a referee on the amount of a bill rendered under this section or a redetermination of the amount shall be in accordance with the provisions of section 1331 of this title, and the decision of the referee shall be subject to the provisions of that section. Review of the decision of the referee by the Employment Security Board shall be in accordance with, and its decision shall be subject to, the provisions of section 1332 of this title.

(F) Any employer, including the State of Vermont, that makes payments in lieu of contributions under this section shall be subject to the provisions of sections 1314, 1322, 1328, 1329, 1334, and 1336 of this title as follows:

(i) The employer shall be liable for any reports required by the Commissioner pursuant to sections 1314 and 1322 of this title.

(ii) The employer shall be liable for any penalty imposed pursuant to sections 1314 and 1328 of this title.

(iii) The employer shall be liable for the same interest on past due payments pursuant to subsection 1329(a) of this title.

(iv) The employer shall be subject to a civil action for the collection of past due payments as if those payments were contributions pursuant to subsections 1329(b) and 1334(a) of this title.

(v) The employer shall be subject to actions for the collection of past due payments as if those payments were contributions pursuant to subsections 1329(c) and (d) and 1334(b) and (c) and section 1336 of this title; however, those provisions shall not apply to the State of Vermont.

(4) Authority to terminate elections. If any nonprofit organization is delinquent in making payments in lieu of contributions as required under this subsection, the Commissioner may terminate the organization’s election to make payments in lieu of contributions as of the beginning of the next taxable year, and the termination shall be effective for that and the next taxable year.

(5) Allocation of benefit costs.

(A) Each employer that is liable for payments in lieu of contributions shall pay to the Commissioner for the Trust Fund the amount of regular benefits plus the amount of one-half of extended benefits paid that are attributable to service in the employ of the employer.

(B) If benefits paid to an individual are based on wages paid by more than one employer and one or more of the employers are liable for payments in lieu of contributions, the amount payable to the Trust Fund by each employer that is liable for payments in lieu of contributions shall be an amount that bears the same ratio to the total benefits paid to the individual as the total base-period wages paid to the individual by the employer bear to the total base-period wages paid to the individual by all of the individual’s base-period employers.

(6) Group accounts. Two or more employers that have become liable for payments in lieu of contributions, in accordance with the provisions of this section and section 1380 of this title, may file a joint application to the Commissioner for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of the employers. Each application shall identify and authorize a group representative to act as the group’s agent for the purpose of this section. Upon approval of the application, the Commissioner shall establish a group account for the employers effective as of the beginning of the calendar quarter in which the Commissioner receives the application and shall notify the group’s representative of the effective date of the account. The account shall remain in effect for not less than two years and thereafter until terminated at the discretion of the Commissioner or upon application by the group. Upon establishment of the account, each member of the group shall be liable for payments in lieu of contributions with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in the quarter that are attributable to service performed in the employ of all members of the group as the total wages paid for service in employment by the member in the quarter bear to the total wages paid during the quarter for service performed in the employ of all members of the group. The Board shall adopt rules as it deems necessary with respect to applications for establishment, maintenance, and termination of group accounts that are authorized by this subdivision, for addition of new members to, and withdrawal of active members from, such accounts, and for the determination of the amounts that are payable under this subsection by members of the group and the time and manner of the payments.

(7) [Repealed.]

(d) In lieu of contributions required of employers subject to this chapter, the State of Vermont, including State hospitals but excluding any State institution of higher education, shall pay to the Commissioner, for the Unemployment Compensation Fund, an amount equal to the amount of benefits paid, including the full amount of extended benefits paid, attributable to service by individuals in the employ of the State. At the end of each calendar quarter, or at the end of any other period as determined by the Commissioner, the Commissioner shall bill the State for the amount of benefits paid during such quarter or other prescribed period that is attributable to service in the employ of the State. Subdivisions (c)(3)(C) through (3)(F), inclusive, and subdivisions (c)(5) and (6) of this section as they apply to nonprofit organizations shall also apply to the State of Vermont, except that the State shall be liable for all benefits paid, including the full amount of extended benefits paid, attributable to service in the employ of the State.

(e) Any municipality, any State institution of higher education, and any political or governmental subdivisions or instrumentalities of the State shall pay contributions unless it elects to pay to the Commissioner for the Unemployment Compensation Fund, an amount equal to the amount of benefits paid, including the full amount of extended benefits paid, attributable to service by individuals in the employ of these entities. Subsections (a) and (b) and subdivisions (c)(3)(C) through (3)(F), inclusive, and subdivisions (c)(4) through (6), inclusive of this section as they apply to nonprofit organizations shall also apply to the entities designated in this subsection, except that these entities shall be liable for all benefits paid, including the full amount of extended benefits paid, attributable to service in the employ of these entities.

(1) Any entity designated in this subsection that is, or becomes, subject to this chapter on January 1, 1978 may elect to become liable for payments in lieu of contributions for a period of not less than one calendar year beginning with January 1, 1978 provided it files with the Commissioner a written notice of its election within the 30-day period immediately following that date.

(2) Any entity designated in this subsection that becomes subject to this chapter after January 1, 1978 may elect to become liable for payments in lieu of contributions for a period of not less than one calendar year following the date on which the subjectivity begins by filing a written notice of its election with the Commissioner not later than 30 days immediately following the date of the determination of that subjectivity.

(3) Any entity designated in this subsection that makes an election in accordance with subdivisions (1) and (2) of this subsection will continue to be liable for payments in lieu of contributions until it files with the Commissioner a written notice terminating its election not later than 30 days prior to the beginning of the calendar year for which the termination shall first be effective.

(4) Any entity designated in this subsection that has been paying contributions under this chapter for a period subsequent to January 1, 1978 may change to a reimbursable basis by filing with the Commissioner not later than 30 days prior to the beginning of any calendar year a written notice of election to become liable for payments in lieu of contributions. The election shall not be terminable by the organization for that year and the next year.

(5) The Commissioner may for good cause extend the period within which a notice of election, or a notice of termination, must be filed and may permit an election to be retroactive but not any earlier than with respect to benefits paid after the date that entity became subject to this chapter.

(6) The Commissioner shall notify each entity designated in this subsection of any determinations that he or she may make of its status as an employer and of the effective date of any election that it makes and of any termination of that election. The determination shall be subject to reconsideration and to appeal and review in accordance with the provisions of section 1337a of this title.

(f) Any employer who makes payments in lieu of contributions under the provisions of this section is considered to be self-insuring and shall pay to the Commissioner for the Unemployment Compensation Trust Fund any amounts the Commissioner finds to be due under this chapter, including benefits paid but denied on appeal or benefits paid in error that cannot be properly charged either against another employer who makes payments in lieu of contributions or against the experience-rating record of another employer who pays contributions. Benefits improperly paid where repayment by the claimant is ordered pursuant to subsection 1347(a) or (b) of this title will be credited to the employer’s account when repayment from the claimant is actually received by the Commissioner. (Amended 1959, No. 329 (Adj. Sess.), § 22, eff. March 1, 1961; 1963, No. 106, § 1, eff. Jan. 1, 1964; 1971, No. 77, § 3, eff. Dec. 31, 1971; 1977, No. 64, §§ 8-11, 23; 1979, No. 120 (Adj. Sess.), § 7, eff. April 14, 1980; 1981, No. 86, § 9, eff. May 10, 1981; 1983, No. 16, §§ 3-5, eff. April 4, 1983; 1989, No. 132 (Adj. Sess.), § 4; 1991, No. 183 (Adj. Sess.), § 3; 2009, No. 2 (Sp. Sess.), § 1, eff. June 9, 2009; 2009, No. 124 (Adj. Sess.), § 2; 2023, No. 76, § 41, eff. July 1, 2023.)