Bill Text: IL HB0814 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Unemployment Insurance Act. Deletes provisions requiring employers to file, on a monthly basis, reports regarding employee wages. Makes corresponding changes.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-08 - Session Sine Die [HB0814 Detail]

Download: Illinois-2017-HB0814-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB0814 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED:
820 ILCS 405/1400.2
820 ILCS 405/1402 from Ch. 48, par. 552
820 ILCS 405/1404 from Ch. 48, par. 554
820 ILCS 405/1405 from Ch. 48, par. 555
Amends the Unemployment Insurance Act. Deletes provisions requiring employers to file, on a monthly basis, reports regarding employee wages. Makes corresponding changes.
LRB100 06928 HEP 16979 b
A BILL FOR
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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 1400.2, 1402, 1404, and 1405 as follows:
(820 ILCS 405/1400.2)
Sec. 1400.2. Annual reporting and paying; household
workers. This Section applies to an employer who solely employs
one or more household workers with respect to whom the employer
files federal unemployment taxes as part of his or her federal
income tax return, or could file federal unemployment taxes as
part of his or her federal income tax return if the worker or
workers were providing services in employment for purposes of
the federal unemployment tax. For purposes of this Section,
"household worker" has the meaning ascribed to it for purposes
of Section 3510 of the federal Internal Revenue Code. If an
employer to whom this Section applies notifies the Director, in
writing, that he or she wishes to pay his or her contributions
for each quarter and submit his or her wage reports for each
month or quarter, as the case may be, on an annual basis, then
the due date for filing the reports and paying the
contributions shall be April 15 of the calendar year
immediately following the close of the months or quarters to

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which the reports and quarters to which the contributions
apply, except that the Director may, by rule, establish a
different due date for good cause.
(Source: P.A. 97-689, eff. 6-14-12.)
(820 ILCS 405/1402) (from Ch. 48, par. 552)
Sec. 1402. Penalties.
A. If any employer fails, within the time prescribed in
this Act as amended and in effect on October 5, 1980, and the
regulations of the Director, to file a report of wages paid to
each of his workers, or to file a sufficient report of such
wages after having been notified by the Director to do so, for
any period which begins prior to January 1, 1982, he shall pay
to the Department as a penalty a sum determined in accordance
with the provisions of this Act as amended and in effect on
October 5, 1980.
B. Except as otherwise provided in this Section, any
employer who fails to file a report of wages paid to each of
his workers for any period which begins on or after January 1,
1982, within the time prescribed by the provisions of this Act
and the regulations of the Director, or, if the Director
pursuant to such regulations extends the time for filing the
report, fails to file it within the extended time, shall, in
addition to any sum otherwise payable by him under the
provisions of this Act, pay to the Department as a penalty a
sum equal to the lesser of (1) $5 for each $10,000 or fraction

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thereof of the total wages for insured work paid by him during
the period or (2) $2,500, for each month or part thereof of
such failure to file the report. With respect to an employer
who has elected to file reports of wages on an annual basis
pursuant to Section 1400.2, in assessing penalties for the
failure to submit all reports by the due date established
pursuant to that Section, the 30-day period immediately
following the due date shall be considered as one month.
If the Director deems an employer's report of wages paid to
each of his workers for any period which begins on or after
January 1, 1982, insufficient, he shall notify the employer to
file a sufficient report. If the employer fails to file such
sufficient report within 30 days after the mailing of the
notice to him, he shall, in addition to any sum otherwise
payable by him under the provisions of this Act, pay to the
Department as a penalty a sum determined in accordance with the
provisions of the first paragraph of this subsection, for each
month or part thereof of such failure to file such sufficient
report after the date of the notice.
For wages paid in calendar years prior to 1988, the penalty
or penalties which accrue under the two foregoing paragraphs
with respect to a report for any period shall not be less than
$100, and shall not exceed the lesser of (1) $10 for each
$10,000 or fraction thereof of the total wages for insured work
paid during the period or (2) $5,000. For wages paid in
calendar years after 1987, the penalty or penalties which

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accrue under the 2 foregoing paragraphs with respect to a
report for any period shall not be less than $50, and shall not
exceed the lesser of (1) $10 for each $10,000 or fraction of
the total wages for insured work paid during the period or (2)
$5,000. With respect to an employer who has elected to file
reports of wages on an annual basis pursuant to Section 1400.2,
for purposes of calculating the minimum penalty prescribed by
this Section for failure to file the reports on a timely basis,
a calendar year shall constitute a single period. For reports
of wages paid after 1986, the Director shall not, however,
impose a penalty pursuant to either of the two foregoing
paragraphs on any employer who can prove within 30 working days
after the mailing of a notice of his failure to file such a
report, that (1) the failure to file the report is his first
such failure during the previous 20 consecutive calendar
quarters, and (2) the amount of the total contributions due for
the calendar quarter of such report (or, in the case of an
employer who is required to file the reports on a monthly
basis, the amount of the total contributions due for the
calendar quarter that includes the month of such report) is
less than $500.
For any month which begins on or after January 1, 2013, a
report of the wages paid to each of an employer's workers shall
be due on or before the last day of the month next following
the calendar month in which the wages were paid if the employer
is required to report such wages electronically pursuant to the

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regulations of the Director; otherwise a report of the wages
paid to each of the employer's workers shall be due on or
before the last day of the month next following the calendar
quarter in which the wages were paid.
Any employer who willfully fails to pay any contribution or
part thereof, based upon wages paid prior to 1987, when
required by the provisions of this Act and the regulations of
the Director, with intent to defraud the Director, shall in
addition to such contribution or part thereof pay to the
Department a penalty equal to 50 percent of the amount of such
contribution or part thereof, as the case may be, provided that
the penalty shall not be less than $200.
Any employer who willfully fails to pay any contribution or
part thereof, based upon wages paid in 1987 and in each
calendar year thereafter, when required by the provisions of
this Act and the regulations of the Director, with intent to
defraud the Director, shall in addition to such contribution or
part thereof pay to the Department a penalty equal to 60% of
the amount of such contribution or part thereof, as the case
may be, provided that the penalty shall not be less than $400.
However, all or part of any penalty may be waived by the
Director for good cause shown.
C. (Blank). With regard to an employer required to report
monthly pursuant to this Section, in addition to each
employee's name, social security number, and wages for insured
work paid during the period, the Director may, by rule, require

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a report to provide the following information concerning each
employee: the employee's occupation, hours worked during the
period, hourly wage, if applicable, and work location if the
employer has more than one physical location. Notwithstanding
any other provision of any other law to the contrary,
information obtained pursuant to this subsection shall not be
disclosed to any other public official or agency of this State
or any other state to the extent it relates to a specifically
identified individual or entity or to the extent that the
identity of a specific individual or entity may be discerned
from such information. The additional data elements required to
be reported pursuant to the rule authorized by this subsection
may be reported in the same electronic format as in the system
maintained by the employer or employer's agent and need not be
reformatted.
(Source: P.A. 97-689, eff. 6-14-12; 97-791, eff. 1-1-13;
98-463, eff. 8-16-13; 98-1133, eff. 12-23-14.)
(820 ILCS 405/1404) (from Ch. 48, par. 554)
Sec. 1404. Payments in lieu of contributions by nonprofit
organizations.
A. For the year 1972 and for each calendar year thereafter,
contributions shall accrue and become payable, pursuant to
Section 1400, by each nonprofit organization (defined in
Section 211.2) upon the wages paid by it with respect to
employment after 1971, unless the nonprofit organization

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elects, in accordance with the provisions of this Section, to
pay, in lieu of contributions, an amount equal to the amount of
regular benefits and one-half the amount of extended benefits
(defined in Section 409) paid to individuals, for any weeks
which begin on or after the effective date of the election, on
the basis of wages for insured work paid to them by such
nonprofit organization during the effective period of such
election. Notwithstanding the preceding provisions of this
subsection and the provisions of subsection D, with respect to
benefit years beginning prior to July 1, 1989, any adjustment
after September 30, 1989 to the base period wages paid to the
individual by any employer shall not affect the ratio for
determining the payments in lieu of contributions of a
nonprofit organization which has elected to make payments in
lieu of contributions. Provided, however, that with respect to
benefit years beginning on or after July 1, 1989, the nonprofit
organization shall be required to make payments equal to 100%
of regular benefits, including dependents' allowances, and 50%
of extended benefits, including dependents' allowances, paid
to an individual with respect to benefit years beginning during
the effective period of the election, but only if the nonprofit
organization: (a) is the last employer as provided in Section
1502.1 and (b) paid to the individual receiving benefits, wages
for insured work during his base period. If the nonprofit
organization described in this paragraph meets the
requirements of (a) but not (b), with respect to benefit years

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beginning on or after July 1, 1989, it shall be required to
make payments in an amount equal to 50% of regular benefits,
including dependents' allowances, and 25% of extended
benefits, including dependents' allowances, paid to an
individual with respect to benefit years beginning during the
effective period of the election.
1. Any employing unit which becomes a nonprofit
organization on January 1, 1972, may elect to make payments
in lieu of contributions for not less than one calendar
year beginning with January 1, 1972, provided that it files
its written election with the Director not later than
January 31, 1972.
2. Any employing unit which becomes a nonprofit
organization after January 1, 1972, may elect to make
payments in lieu of contributions for a period of not less
than one calendar year beginning as of the first day with
respect to which it would, in the absence of its election,
incur liability for the payment of contributions, provided
that it files its written election with the Director not
later than 30 days immediately following the end of the
calendar quarter in which it becomes a nonprofit
organization.
3. A nonprofit organization which has incurred
liability for the payment of contributions for at least 2
calendar years and is not delinquent in such payment and in
the payment of any interest or penalties which may have

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accrued, may elect to make payments in lieu of
contributions beginning January 1 of any calendar year,
provided that it files its written election with the
Director prior to such January 1, and provided, further,
that such election shall be for a period of not less than 2
calendar years.
4. An election to make payments in lieu of
contributions shall not terminate any liability incurred
by an employer for the payment of contributions, interest
or penalties with respect to any calendar quarter (or
month, as the case may be) which ends prior to the
effective period of the election.
5. A nonprofit organization which has elected,
pursuant to paragraph 1, 2, or 3, to make payments in lieu
of contributions may terminate the effective period of the
election as of January 1 of any calendar year subsequent to
the required minimum period of the election only if, prior
to such January 1, it files with the Director a written
notice to that effect. Upon such termination, the
organization shall become liable for the payment of
contributions upon wages for insured work paid by it on and
after such January 1 and, notwithstanding such
termination, it shall continue to be liable for payments in
lieu of contributions with respect to benefits paid to
individuals on and after such January 1, with respect to
benefit years beginning prior to July 1, 1989, on the basis

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of wages for insured work paid to them by the nonprofit
organization prior to such January 1, and, with respect to
benefit years beginning after June 30, 1989, if such
employer was the last employer as provided in Section
1502.1 during a benefit year beginning prior to such
January 1.
6. Written elections to make payments in lieu of
contributions and written notices of termination of
election shall be filed in such form and shall contain such
information as the Director may prescribe. Upon the filing
of such election or notice, the Director shall either order
it approved, or, if it appears to the Director that the
nonprofit organization has not filed such election or
notice within the time prescribed, he shall order it
disapproved. The Director shall serve notice of his order
upon the nonprofit organization. The Director's order
shall be final and conclusive upon the nonprofit
organization unless, within 15 days after the date of
mailing of notice thereof, the nonprofit organization
files with the Director an application for its review,
setting forth its reasons in support thereof. Upon receipt
of an application for review within the time prescribed,
the Director shall order it allowed, or shall order that it
be denied, and shall serve notice upon the nonprofit
organization of his order. All of the provisions of Section
1509, applicable to orders denying applications for review

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of determinations of employers' rates of contribution and
not inconsistent with the provisions of this subsection,
shall be applicable to an order denying an application for
review filed pursuant to this subsection.
B. As soon as practicable following the close of each
calendar quarter, the Director shall mail to each nonprofit
organization which has elected to make payments in lieu of
contributions a Statement of the amount due from it for the
regular and one-half the extended benefits paid (or the amounts
otherwise provided for in subsection A) during the calendar
quarter, together with the names of its workers or former
workers and the amounts of benefits paid to each of them during
the calendar quarter, with respect to benefit years beginning
prior to July 1, 1989, on the basis of wages for insured work
paid to them by the nonprofit organization; or, with respect to
benefit years beginning after June 30, 1989, if such nonprofit
organization was the last employer as provided in Section
1502.1 with respect to a benefit year beginning during the
effective period of the election. The amount due shall be
payable, and the nonprofit organization shall make payment of
such amount not later than 30 days after the date of mailing of
the Statement. The Statement shall be final and conclusive upon
the nonprofit organization unless, within 20 days after the
date of mailing of the Statement, the nonprofit organization
files with the Director an application for revision thereof.
Such application shall specify wherein the nonprofit

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organization believes the Statement to be incorrect, and shall
set forth its reasons for such belief. All of the provisions of
Section 1508, applicable to applications for revision of
Statements of Benefit Wages and Statements of Benefit Charges
and not inconsistent with the provisions of this subsection,
shall be applicable to an application for revision of a
Statement filed pursuant to this subsection.
1. Payments in lieu of contributions made by any
nonprofit organization shall not be deducted or
deductible, in whole or in part, from the remuneration of
individuals in the employ of the organization, nor shall
any nonprofit organization require or accept any waiver of
any right under this Act by an individual in its employ.
The making of any such deduction or the requirement or
acceptance of any such waiver is a Class A misdemeanor. Any
agreement by an individual in the employ of any person or
concern to pay all or any portion of a payment in lieu of
contributions, required under this Act from a nonprofit
organization, is void.
2. A nonprofit organization which fails to make any
payment in lieu of contributions when due under the
provisions of this subsection shall pay interest thereon at
the rates specified in Section 1401. A nonprofit
organization which has elected to make payments in lieu of
contributions shall be subject to the penalty provisions of
Section 1402. In the making of any payment in lieu of

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contributions or in the payment of any interest or
penalties, a fractional part of a cent shall be disregarded
unless it amounts to one-half cent or more, in which case
it shall be increased to one cent.
3. All of the remedies available to the Director under
the provisions of this Act or of any other law to enforce
the payment of contributions, interest, or penalties under
this Act, including the making of determinations and
assessments pursuant to Section 2200, are applicable to the
enforcement of payments in lieu of contributions and of
interest and penalties, due under the provisions of this
Section. For the purposes of this paragraph, the term
"contribution" or "contributions" which appears in any
such provision means "payment in lieu of contributions" or
"payments in lieu of contributions." The term
"contribution" which appears in Section 2800 also means
"payment in lieu of contributions."
4. All of the provisions of Sections 2201 and 2201.1,
applicable to adjustment or refund of contributions,
interest and penalties erroneously paid and not
inconsistent with the provisions of this Section, shall be
applicable to payments in lieu of contributions
erroneously made or interest or penalties erroneously paid
by a nonprofit organization.
5. Payment in lieu of contributions shall be due with
respect to any sum erroneously paid as benefits to an

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individual unless such sum has been recouped pursuant to
Section 900 or has otherwise been recovered. If such
payment in lieu of contributions has been made, the amount
thereof shall be adjusted or refunded in accordance with
the provisions of paragraph 4 and Section 2201 if
recoupment or other recovery has been made.
6. A nonprofit organization which has elected to make
payments in lieu of contributions and thereafter ceases to
be an employer shall continue to be liable for payments in
lieu of contributions with respect to benefits paid to
individuals on and after the date it has ceased to be an
employer, with respect to benefit years beginning prior to
July 1, 1989, on the basis of wages for insured work paid
to them by it prior to the date it ceased to be an
employer, and, with respect to benefit years beginning
after June 30, 1989, if such employer was the last employer
as provided in Section 1502.1 prior to the date that it
ceased to be an employer.
7. With respect to benefit years beginning prior to
July 1, 1989, wages paid to an individual during his base
period, by a nonprofit organization which elects to make
payments in lieu of contributions, for less than full time
work, performed during the same weeks in the base period
during which the individual had other insured work, shall
not be subject to payments in lieu of contributions (upon
such employer's request pursuant to the regulation of the

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Director) so long as the employer continued after the end
of the base period, and continues during the applicable
benefit year, to furnish such less than full time work to
the individual on the same basis and in substantially the
same amount as during the base period. If the individual is
paid benefits with respect to a week (in the applicable
benefit year) after the employer has ceased to furnish the
work hereinabove described, the nonprofit organization
shall be liable for payments in lieu of contributions with
respect to the benefits paid to the individual after the
date on which the nonprofit organization ceases to furnish
the work.
C. With respect to benefit years beginning prior to July 1,
1989, whenever benefits have been paid to an individual on the
basis of wages for insured work paid to him by a nonprofit
organization, and the organization incurred liability for the
payment of contributions on some of the wages because only a
part of the individual's base period was within the effective
period of the organization's written election to make payments
in lieu of contributions, the organization shall pay an amount
in lieu of contributions which bears the same ratio to the
total benefits paid to the individual as the total wages for
insured work paid to him during the base period by the
organization upon which it did not incur liability for the
payment of contributions (for the aforesaid reason) bear to the
total wages for insured work paid to the individual during the

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base period by the organization.
D. With respect to benefit years beginning prior to July 1,
1989, whenever benefits have been paid to an individual on the
basis of wages for insured work paid to him by a nonprofit
organization which has elected to make payments in lieu of
contributions, and by one or more other employers, the
nonprofit organization shall pay an amount in lieu of
contributions which bears the same ratio to the total benefits
paid to the individual as the wages for insured work paid to
the individual during his base period by the nonprofit
organization bear to the total wages for insured work paid to
the individual during the base period by all of the employers.
If the nonprofit organization incurred liability for the
payment of contributions on some of the wages for insured work
paid to the individual, it shall be treated, with respect to
such wages, as one of the other employers for the purposes of
this paragraph.
E. Two or more nonprofit organizations which have elected
to make payments in lieu of contributions may file a joint
application with the Director for the establishment of a group
account, effective January 1 of any calendar year, for the
purpose of sharing the cost of benefits paid on the basis of
the wages for insured work paid by such nonprofit
organizations, provided that such joint application is filed
with the Director prior to such January 1. The application
shall identify and authorize a group representative to act as

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the group's agent for the purposes of this paragraph, and shall
be filed in such form and shall contain such information as the
Director may prescribe. Upon his approval of a joint
application, the Director shall, by order, establish a group
account for the applicants and shall serve notice upon the
group's representative of such order. Such account shall remain
in effect for not less than 2 calendar years and thereafter
until terminated by the Director for good cause or, as of the
close of any calendar quarter, upon application by the group.
Upon establishment of the account, the group shall be liable to
the Director for payments in lieu of contributions in an amount
equal to the total amount for which, in the absence of the
group account, liability would have been incurred by all of its
members; provided, with respect to benefit years beginning
prior to July 1, 1989, that the liability of any member to the
Director with respect to any payment in lieu of contributions,
interest or penalties not paid by the group when due with
respect to any calendar quarter shall be in an amount which
bears the same ratio to the total benefits paid during such
quarter on the basis of the wages for insured work paid by all
members of the group as the total wages for insured work paid
by such member during such quarter bear to the total wages for
insured work paid during the quarter by all members of the
group, and, with respect to benefit years beginning on or after
July 1, 1989, that the liability of any member to the Director
with respect to any payment in lieu of contributions, interest

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or penalties not paid by the group when due with respect to any
calendar quarter shall be in an amount which bears the same
ratio to the total benefits paid during such quarter to
individuals with respect to whom any member of the group was
the last employer as provided in Section 1502.1 as the total
wages for insured work paid by such member during such quarter
bear to the total wages for insured work paid during the
quarter by all members of the group. With respect to calendar
months and quarters beginning on or after January 1, 2013, the
liability of any member to the Director with respect to any
penalties that are assessed for failure to file a timely and
sufficient report of wages and which are not paid by the group
when due with respect to the calendar month or quarter, as the
case may be, shall be in an amount which bears the same ratio
to the total penalties due with respect to such month or
quarter as the total wages for insured work paid by such member
during such month or quarter bear to the total wages for
insured work paid during the month or quarter by all members of
the group. All of the provisions of this Section applicable to
nonprofit organizations which have elected to make payments in
lieu of contributions, and not inconsistent with the provisions
of this paragraph, shall apply to a group account and, upon its
termination, to each former member thereof. The Director shall
by regulation prescribe the conditions for establishment,
maintenance and termination of group accounts, and for addition
of new members to and withdrawal of active members from such

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accounts.
F. Whenever service of notice is required by this Section,
such notice may be given and be complete by depositing it with
the United States Mail, addressed to the nonprofit organization
(or, in the case of a group account, to its representative) at
its last known address. If such organization is represented by
counsel in proceedings before the Director, service of notice
may be made upon the nonprofit organization by mailing the
notice to such counsel.
(Source: P.A. 97-689, eff. 6-14-12.)
(820 ILCS 405/1405) (from Ch. 48, par. 555)
Sec. 1405. Financing Benefits for Employees of Local
Governments.
A. 1. For the year 1978 and for each calendar year
thereafter, contributions shall accrue and become payable,
pursuant to Section 1400, by each governmental entity (other
than the State of Illinois and its wholly owned
instrumentalities) referred to in clause (B) of Section 211.1,
upon the wages paid by such entity with respect to employment
after 1977, unless the entity elects to make payments in lieu
of contributions pursuant to the provisions of subsection B.
Notwithstanding the provisions of Sections 1500 to 1510,
inclusive, a governmental entity which has not made such
election shall, for liability for contributions incurred prior
to January 1, 1984, pay contributions equal to 1 percent with

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respect to wages for insured work paid during each such
calendar year or portion of such year as may be applicable. As
used in this subsection, the word "wages", defined in Section
234, is subject to all of the provisions of Section 235.
2. An Indian tribe for which service is exempted from the
federal unemployment tax under Section 3306(c)(7) of the
Federal Unemployment Tax Act may elect to make payments in lieu
of contributions in the same manner and subject to the same
conditions as provided in this Section with regard to
governmental entities, except as otherwise provided in
paragraphs 7, 8, and 9 of subsection B.
B. Any governmental entity subject to subsection A may
elect to make payments in lieu of contributions, in amounts
equal to the amounts of regular and extended benefits paid to
individuals, for any weeks which begin on or after the
effective date of the election, on the basis of wages for
insured work paid to them by the entity during the effective
period of such election. Notwithstanding the preceding
provisions of this subsection and the provisions of subsection
D of Section 1404, with respect to benefit years beginning
prior to July 1, 1989, any adjustment after September 30, 1989
to the base period wages paid to the individual by any employer
shall not affect the ratio for determining payments in lieu of
contributions of a governmental entity which has elected to
make payments in lieu of contributions. Provided, however, that
with respect to benefit years beginning on or after July 1,

HB0814 - 21 - LRB100 06928 HEP 16979 b
1989, the governmental entity shall be required to make
payments equal to 100% of regular benefits, including
dependents' allowances, and 100% of extended benefits,
including dependents' allowances, paid to an individual with
respect to benefit years beginning during the effective period
of the election, but only if the governmental entity: (a) is
the last employer as provided in Section 1502.1 and (b) paid to
the individual receiving benefits, wages for insured work
during his base period. If the governmental entity described in
this paragraph meets the requirements of (a) but not (b), with
respect to benefit years beginning on or after July 1, 1989, it
shall be required to make payments in an amount equal to 50% of
regular benefits, including dependents' allowances, and 50% of
extended benefits, including dependents' allowances, paid to
an individual with respect to benefit years beginning during
the effective period of the election.
1. Any such governmental entity which becomes an employer
on January 1, 1978 pursuant to Section 205 may elect to make
payments in lieu of contributions for not less than one
calendar year beginning with January 1, 1978, provided that it
files its written election with the Director not later than
January 31, 1978.
2. A governmental entity newly created after January 1,
1978, may elect to make payments in lieu of contributions for a
period of not less than one calendar year beginning as of the
first day with respect to which it would, in the absence of its

HB0814 - 22 - LRB100 06928 HEP 16979 b
election, incur liability for the payment of contributions,
provided that it files its written election with the Director
not later than 30 days immediately following the end of the
calendar quarter in which it has been created.
3. A governmental entity which has incurred liability for
the payment of contributions for at least 2 calendar years, and
is not delinquent in such payment and in the payment of any
interest or penalties which may have accrued, may elect to make
payments in lieu of contributions beginning January 1 of any
calendar year, provided that it files its written election with
the Director prior to such January 1, and provided, further,
that such election shall be for a period of not less than 2
calendar years.
4. An election to make payments in lieu of contributions
shall not terminate any liability incurred by a governmental
entity for the payment of contributions, interest or penalties
with respect to any calendar quarter (or month, as the case may
be) which ends prior to the effective period of the election.
5. The termination by a governmental entity of the
effective period of its election to make payments in lieu of
contributions, and the filing of and subsequent action upon
written notices of termination of election, shall be governed
by the provisions of paragraphs 5 and 6 of Section 1404A,
pertaining to nonprofit organizations.
6. With respect to benefit years beginning prior to July 1,
1989, wages paid to an individual during his base period by a

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governmental entity which elects to make payments in lieu of
contributions for less than full time work, performed during
the same weeks in the base period during which the individual
had other insured work, shall not be subject to payments in
lieu of contribution (upon such employer's request pursuant to
the regulation of the Director) so long as the employer
continued after the end of the base period, and continues
during the applicable benefit year, to furnish such less than
full time work to the individual on the same basis and in
substantially the same amount as during the base period. If the
individual is paid benefits with respect to a week (in the
applicable benefit year) after the employer has ceased to
furnish the work hereinabove described, the governmental
entity shall be liable for payments in lieu of contributions
with respect to the benefits paid to the individual after the
date on which the governmental entity ceases to furnish the
work.
7. An Indian tribe may elect to make payments in lieu of
contributions for calendar year 2003, provided that it files
its written election with the Director not later than January
31, 2003, and provided further that it is not delinquent in the
payment of any contributions, interest, or penalties.
8. Failure of an Indian tribe to make a payment in lieu of
contributions, or a payment of interest or penalties due under
this Act, within 90 days after the Department serves notice of
the finality of a determination and assessment shall cause the

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Indian tribe to lose the option of making payments in lieu of
contributions, effective as of the calendar year immediately
following the date on which the Department serves the notice.
Notice of the loss of the option to make payments in lieu of
contributions may be protested in the same manner as a
determination and assessment under Section 2200 of this Act.
9. An Indian tribe that, pursuant to paragraph 8, loses the
option of making payments in lieu of contributions may again
elect to make payments in lieu of contributions for a calendar
year if: (a) the Indian tribe has incurred liability for the
payment of contributions for at least one calendar year since
losing the option pursuant to paragraph 8, (b) the Indian tribe
is not delinquent in the payment of any liabilities under the
Act, including interest or penalties, and (c) the Indian tribe
files its written election with the Director not later than
January 31 of the year with respect to which it is making the
election.
C. As soon as practicable following the close of each
calendar quarter, the Director shall mail to each governmental
entity which has elected to make payments in lieu of
contributions a Statement of the amount due from it for all the
regular and extended benefits paid during the calendar quarter,
together with the names of its workers or former workers and
the amounts of benefits paid to each of them during the
calendar quarter with respect to benefit years beginning prior
to July 1, 1989, on the basis of wages for insured work paid to

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them by the governmental entity; or, with respect to benefit
years beginning after June 30, 1989, if such governmental
entity was the last employer as provided in Section 1502.1 with
respect to a benefit year beginning during the effective period
of the election. All of the provisions of subsection B of
Section 1404 pertaining to nonprofit organizations, not
inconsistent with the preceding sentence, shall be applicable
to payments in lieu of contributions by a governmental entity.
D. The provisions of subsections C through F, inclusive, of
Section 1404, pertaining to nonprofit organizations, shall be
applicable to each governmental entity which has elected to
make payments in lieu of contributions.
E. 1. If an Indian tribe fails to pay any liability under
this Act (including assessments of interest or penalty) within
90 days after the Department issues a notice of the finality of
a determination and assessment, the Director shall immediately
notify the United States Internal Revenue Service and the
United States Department of Labor.
2. Notices of payment and reporting delinquencies to Indian
tribes shall include information that failure to make full
payment within the prescribed time frame:
a. will cause the Indian tribe to lose the exemption
provided by Section 3306(c)(7) of the Federal Unemployment
Tax Act with respect to the federal unemployment tax;
b. will cause the Indian tribe to lose the option to
make payments in lieu of contributions.

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(Source: P.A. 97-689, eff. 6-14-12.)