Session Law

Identifying Information:L. 2002 ch. 084
Other Identifying Information:2002 House Bill 3021
Tax Type:Other
Brief Description:An Act concerning the employment security law; amending K.S.A. 44-705 and K.S.A. 2001 Supp. 44-703 and 44-710 and repealing the existing sections.
Keywords:


Body:

CHAPTER 84

HOUSE BILL No. 3021

An Act concerning the employment security law; amending K.S.A. 44-705 and

K.S.A. 2001 Supp. 44-703 and 44-710 and repealing the existing sections.


Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 2001 Supp. 44-703 is hereby amended to read as

follows: 44-703. As used in this act, unless the context clearly requires

otherwise:

(a) (1) ``Annual payroll'' means the total amount of wages paid or

payable by an employer during the calendar year.

(2) ``Average annual payroll'' means the average of the annual payrolls

of any employer for the last three calendar years immediately preceding

the computation date as hereinafter defined if the employer has been

continuously subject to contributions during those three calendar years

and has paid some wages for employment during each of such years. In

determining contribution rates for the calendar year, if an employer has

not been continuously subject to contribution for the three calendar years

immediately preceding the computation date but has paid wages subject

to contributions during only the two calendar years immediately preced-

ing the computation date, such employer's ``average annual payroll'' shall

be the average of the payrolls for those two calendar years.

(3) ``Total wages'' means the total amount of wages paid or payable

by an employer during the calendar year, including that part of remu-

neration in excess of the limitation prescribed as provided in subsection

(o)(1) of this section.

(b) ``Base period'' means the first four of the last five completed cal-

endar quarters immediately preceding the first day of an individual's ben-

efit year, except that the base period in respect to combined wage claims

means the base period as defined in the law of the paying state.

(1) If an individual lacks sufficient base period wages in order to

establish a benefit year in the matter set forth above and satisfies the

requirements of subsection (g) of K.S.A. 44-705 and subsection (hh) of

K.S.A. 44-703, and amendments thereto, the claimant shall have an alter-

native base period substituted for the current base period so as not to

prevent establishment of a valid claim. For the purposes of this subsection,

``alternative base period'' means the last four completed quarters imme-

diately preceding the date the qualifying injury occurred. In the event the

wages in the alternative base period have been used on a prior claim, then

they shall be excluded from the new alternative base period.

(2) For the purposes of this chapter, the term ``base period'' includes

the alternative base period.

(c) (1) ``Benefits'' means the money payments payable to an individ-

ual, as provided in this act, with respect to such individual's unemploy-

ment.

(2) ``Regular benefits'' means benefits payable to an individual under

this act or under any other state law, including benefits payable to federal

civilian employees and to ex-servicemen pursuant to 5 U.S.C. chapter 85,

other than extended benefits.

(d) ``Benefit year'' with respect to any individual, means the period

beginning with the first day of the first week for which such individual

files a valid claim for benefits, and such benefit year shall continue for

one full year. In the case of a combined wage claim, the benefit year shall

be the benefit year of the paying state. Following the termination of a

benefit year, a subsequent benefit year shall commence on the first day

of the first week with respect to which an individual next files a claim for

benefits. When such filing occurs with respect to a week which overlaps

the preceding benefit year, the subsequent benefit year shall commence

on the first day immediately following the expiration date of the preceding

benefit year. Any claim for benefits made in accordance with subsection

(a) of K.S.A. 44-709 and amendments thereto shall be deemed to be a

``valid claim'' for the purposes of this subsection if the individual has been

paid wages for insured work as required under subsection (e) of K.S.A.

44-705 and amendments thereto. Whenever a week of unemployment

overlaps two benefit years, such week shall, for the purpose of granting

waiting-period credit or benefit payment with respect thereto, be deemed

to be a week of unemployment within that benefit year in which the

greater part of such week occurs.

(e) ``Commissioner'' or ``secretary'' means the secretary of human re-

sources.

(f) (1) ``Contributions'' means the money payments to the state em-

ployment security fund which are required to be made by employers on

account of employment under K.S.A. 44-710 and amendments thereto,

and voluntary payments made by employers pursuant to such statute.

(2) ``Payments in lieu of contributions'' means the money payments

to the state employment security fund from employers which are required

to make or which elect to make such payments under subsection (e) of

K.S.A. 44-710 and amendments thereto.

(g) ``Employing unit'' means any individual or type of organization,

including any partnership, association, limited liability company, agency

or department of the state of Kansas and political subdivisions thereof,

trust, estate, joint-stock company, insurance company or corporation,

whether domestic or foreign including nonprofit corporations, or the re-

ceiver, trustee in bankruptcy, trustee or successor thereof, or the legal

representatives of a deceased person, which has in its employ one or more

individuals performing services for it within this state. All individuals per-

forming services within this state for any employing unit which maintains

two or more separate establishments within this state shall be deemed to

be employed by a single employing unit for all the purposes of this act.

Each individual employed to perform or to assist in performing the work

of any agent or employee of an employing unit shall be deemed to be

employed by such employing unit for all the purposes of this act, whether

such individual was hired or paid directly by such employing unit or by

such agent or employee, provided the employing unit had actual or con-

structive knowledge of the employment.

(h) ``Employer'' means:

(1) (A) Any employing unit for which agricultural labor as defined in

subsection (w) of this section is performed and which during any calendar

quarter in either the current or preceding calendar year paid remunera-

tion in cash of $20,000 or more to individuals employed in agricultural

labor or for some portion of a day in each of 20 different calendar weeks,

whether or not such weeks were consecutive, in either the current or the

preceding calendar year, employed in agricultural labor 10 or more in-

dividuals, regardless of whether they were employed at the same moment

of time.

(B) For the purpose of this subsection (h)(1), any individual who is a

member of a crew furnished by a crew leader to perform service in ag-

ricultural labor for any other person shall be treated as an employee of

such crew leader if:

(i) Such crew leader holds a valid certificate of registration under the

federal migrant and seasonal agricultural workers protection act or sub-

stantially all the members of such crew operate or maintain tractors,

mechanized harvesting or cropdusting equipment or any other mecha-

nized equipment, which is provided by such crew leader; and

(ii) such individual is not in the employment of such other person

within the meaning of subsection (i) of this section.

(C) For the purpose of this subsection (h)(1), in the case of any in-

dividual who is furnished by a crew leader to perform service in agricul-

tural labor for any other person and who is not treated as an employee

of such crew leader:

(i) Such other person and not the crew leader shall be treated as the

employer of such individual; and

(ii) such other person shall be treated as having paid cash remuner-

ation to such individual in an amount equal to the amount of cash re-

muneration paid to such individual by the crew leader, either on the crew

leader's own behalf or on behalf of such other person, for the service in

agricultural labor performed for such other person.

(D) For the purposes of this subsection (h)(1) ``crew leader'' means

an individual who:

(i) Furnishes individuals to perform service in agricultural labor for

any other person;

(ii) pays, either on such individual's own behalf or on behalf of such

other person, the individuals so furnished by such individual for the serv-

ice in agricultural labor performed by them; and

(iii) has not entered into a written agreement with such other person

under which such individual is designated as an employee of such other

person.

(2) (A) Any employing unit which: (i) In any calendar quarter in ei-

ther the current or preceding calendar year paid for service in employ-

ment wages of $1,500 or more, or (ii) for some portion of a day in each

of 20 different calendar weeks, whether or not such weeks were consec-

utive, in either the current or preceding calendar year, had in employment

at least one individual, whether or not the same individual was in em-

ployment in each such day.

(B) Employment of individuals to perform domestic service or agri-

cultural labor and wages paid for such service or labor shall not be con-

sidered in determining whether an employing unit meets the criteria of

this subsection (h)(2).

(3) Any employing unit for which service is employment as defined

in subsection (i)(3)(E) of this section.

(4) (A) Any employing unit, whether or not it is an employing unit

under subsection (g) of this section, which acquires or in any manner

succeeds to (i) substantially all of the employing enterprises, organization,

trade or business, or (ii) substantially all the assets, of another employing

unit which at the time of such acquisition was an employer subject to this

act;

(B) any employing unit which is controlled substantially, either di-

rectly or indirectly by legally enforceable means or otherwise, by the same

interest or interests, whether or not such interest or interests are an em-

ploying unit under subsection (g) of this section, which acquires or in any

manner succeeds to a portion of an employer's annual payroll, which is

less than 100% of such employer's annual payroll, and which intends to

continue the acquired portion as a going business.

(5) Any employing unit which paid cash remuneration of $1,000 or

more in any calendar quarter in the current or preceding calendar year

to individuals employed in domestic service as defined in subsection (aa)

of this section.

(6) Any employing unit which having become an employer under this

subsection (h) has not, under subsection (b) of K.S.A. 44-711 and amend-

ments thereto, ceased to be an employer subject to this act.

(7) Any employing unit which has elected to become fully subject to

this act in accordance with subsection (c) of K.S.A. 44-711 and amend-

ments thereto.

(8) Any employing unit not an employer by reason of any other par-

agraph of this subsection (h), for which within either the current or pre-

ceding calendar year services in employment are or were performed with

respect to which such employing unit is liable for any federal tax against

which credit may be taken for contributions required to be paid into a

state unemployment compensation fund; or which, as a condition for ap-

proval of this act for full tax credit against the tax imposed by the federal

unemployment tax act, is required, pursuant to such act, to be an ``em-

ployer'' under this act.

(9) Any employing unit described in section 501(c)(3) of the federal

internal revenue code of 1986 which is exempt from income tax under

section 501(a) of the code that had four or more individuals in employ-

ment for some portion of a day in each of 20 different weeks, whether or

not such weeks were consecutive, within either the current or preceding

calendar year, regardless of whether they were employed at the same

moment of time.

(i) ``Employment'' means:

(1) Subject to the other provisions of this subsection, service, includ-

ing service in interstate commerce, performed by

(A) Any active officer of a corporation; or

(B) any individual who, under the usual common law rules applicable

in determining the employer-employee relationship, has the status of an

employee; or

(C) any individual other than an individual who is an employee under

subsection (i)(1)(A) or subsection (i)(1)(B) above who performs services

for remuneration for any person:

(i) As an agent-driver or commission-driver engaged in distributing

meat products, vegetable products, fruit products, bakery products, bev-

erages (other than milk), or laundry or dry-cleaning services, for such

individual's principal; or

(ii) as a traveling or city salesman, other than as an agent-driver or

commission-driver, engaged upon a full-time basis in the solicitation on

behalf of, and the transmission to, a principal (except for side-line sales

activities on behalf of some other person) of orders from wholesalers,

retailers, contractors, or operators of hotels, restaurants, or other similar

establishments for merchandise for resale or supplies for use in their

business operations.

For purposes of subsection (i)(1)(D), the term ``employment'' shall in-

clude services described in paragraphs (i) and (ii) above only if:

(a) The contract of service contemplates that substantially all of the

services are to be performed personally by such individual;

(b) the individual does not have a substantial investment in facilities

used in connection with the performance of the services (other than in

facilities for transportation); and

(c) the services are not in the nature of a single transaction that is not

part of a continuing relationship with the person for whom the services

are performed.

(2) The term ``employment'' shall include an individual's entire serv-

ice within the United States, even though performed entirely outside this

state if,

(A) The service is not localized in any state, and

(B) the individual is one of a class of employees who are required to

travel outside this state in performance of their duties, and

(C) the individual's base of operations is in this state, or if there is no

base of operations, then the place from which service is directed or con-

trolled is in this state.

(3) The term ``employment'' shall also include:

(A) Services performed within this state but not covered by the pro-

visions of subsection (i)(1) or subsection (i)(2) shall be deemed to be

employment subject to this act if contributions are not required and paid

with respect to such services under an unemployment compensation law

of any other state or of the federal government.

(B) Services performed entirely without this state, with respect to no

part of which contributions are required and paid under an unemploy-

ment compensation law of any other state or of the federal government,

shall be deemed to be employment subject to this act only if the individual

performing such services is a resident of this state and the secretary ap-

proved the election of the employing unit for whom such services are

performed that the entire service of such individual shall be deemed to

be employment subject to this act.

(C) Services covered by an arrangement pursuant to subsection (l) of

K.S.A. 44-714 and amendments thereto between the secretary and the

agency charged with the administration of any other state or federal un-

employment compensation law, pursuant to which all services performed

by an individual for an employing unit are deemed to be performed en-

tirely within this state, shall be deemed to be employment if the secretary

has approved an election of the employing unit for whom such services

are performed, pursuant to which the entire service of such individual

during the period covered by such election is deemed to be insured work.

(D) Services performed by an individual for wages or under any con-

tract of hire shall be deemed to be employment subject to this act unless

and until it is shown to the satisfaction of the secretary that: (i) Such

individual has been and will continue to be free from control or direction

over the performance of such services, both under the individual's con-

tract of hire and in fact; and (ii) such service is either outside the usual

course of the business for which such service is performed or that such

service is performed outside of all the places of business of the enterprise

for which such service is performed.

(E) Service performed by an individual in the employ of this state or

any instrumentality thereof, any political subdivision of this state or any

instrumentality thereof, or in the employ of an Indian tribe, as defined

pursuant to section 3306(u) of the federal unemployment tax act, any

instrumentality of more than one of the foregoing or any instrumentality

which is jointly owned by this state or a political subdivision thereof or

Indian tribes and one or more other states or political subdivisions of this

or other states, provided that such service is excluded from ``employment''

as defined in the federal unemployment tax act by reason of section

3306(c)(7) of that act and is not excluded from ``employment'' under

subsection (i)(4)(A) of this section. For purposes of this section, the ex-

clusions from employment in subsections (i)(4)(A) and (i)(4)(L) shall also

be applicable to services performed in the employ of an Indian tribe.

(F) Service performed by an individual in the employ of a religious,

charitable, educational or other organization which is excluded from the

term ``employment'' as defined in the federal unemployment tax act solely

by reason of section 3306(c)(8) of that act, and is not excluded from

employment under paragraphs (I) through (M) of subsection (i)(4).

(G) The term ``employment'' shall include the service of an individual

who is a citizen of the United States, performed outside the United States

except in Canada, in the employ of an American employer (other than

service which is deemed ``employment'' under the provisions of subsec-

tion (i)(2) or subsection (i)(3) or the parallel provisions of another state's

law), if:

(i) The employer's principal place of business in the United States is

located in this state; or

(ii) the employer has no place of business in the United States, but

(A) The employer is an individual who is a resident of this state; or

(B) the employer is a corporation which is organized under the laws

of this state; or

(C) the employer is a partnership or a trust and the number of the

partners or trustees who are residents of this state is greater than the

number who are residents of any other state; or

(iii) none of the criteria of paragraphs (i) and (ii) above of this sub-

section (i)(3)(G) are met but the employer has elected coverage in this

state or, the employer having failed to elect coverage in any state, the

individual has filed a claim for benefits, based on such service, under the

law of this state.

(H) An ``American employer,'' for purposes of subsection (i)(3)(G),

means a person who is:

(i) An individual who is a resident of the United States; or

(ii) a partnership if 2/3 or more of the partners are residents of the

United States; or

(iii) a trust, if all of the trustees are residents of the United States; or

(iv) a corporation organized under the laws of the United States or

of any state.

(I) Notwithstanding subsection (i)(2) of this section, all service per-

formed by an officer or member of the crew of an American vessel or

American aircraft on or in connection with such vessel or aircraft, if the

operating office, from which the operations of such vessel or aircraft op-

erating within, or within and without, the United States are ordinarily and

regularly supervised, managed, directed and controlled is within this state.

(J) Notwithstanding any other provisions of this subsection (i), service

with respect to which a tax is required to be paid under any federal law

imposing a tax against which credit may be taken for contributions re-

quired to be paid into a state unemployment compensation fund or which

as a condition for full tax credit against the tax imposed by the federal

unemployment tax act is required to be covered under this act.

(K) Domestic service in a private home, local college club or local

chapter of a college fraternity or sorority performed for a person who

paid cash remuneration of $1,000 or more in any calendar quarter in the

current calendar year or the preceding calendar year to individuals em-

ployed in such domestic service.

(4) The term ``employment'' shall not include: (A) Service performed

in the employ of an employer specified in subsection (h)(3) of this section

if such service is performed by an individual in the exercise of duties:

(i) As an elected official;

(ii) as a member of a legislative body, or a member of the judiciary,

of a state, political subdivision or of an Indian tribe;

(iii) as a member of the state national guard or air national guard;

(iv) as an employee serving on a temporary basis in case of fire, storm,

snow, earthquake, flood or similar emergency;

(v) in a position which, under or pursuant to the laws of this state or

tribal law, is designated as a major nontenured policymaking or advisory

position or as a policymaking or advisory position the performance of the

duties of which ordinarily does not require more than eight hours per

week;

(B) service with respect to which unemployment compensation is

payable under an unemployment compensation system established by an

act of congress;

(C) service performed by an individual in the employ of such indi-

vidual's son, daughter or spouse, and service performed by a child under

the age of 21 years in the employ of such individual's father or mother;

(D) service performed in the employ of the United States govern-

ment or an instrumentality of the United States exempt under the con-

stitution of the United States from the contributions imposed by this act,

except that to the extent that the congress of the United States shall

permit states to require any instrumentality of the United States to make

payments into an unemployment fund under a state unemployment com-

pensation law, all of the provisions of this act shall be applicable to such

instrumentalities, and to services performed for such instrumentalities, in

the same manner, to the same extent and on the same terms as to all

other employers, employing units, individuals and services. If this state

shall not be certified for any year by the federal security agency under

section 3304(c) of the federal internal revenue code of 1986, the payments

required of such instrumentalities with respect to such year shall be re-

funded by the secretary from the fund in the same manner and within

the same period as is provided in subsection (f) of K.S.A. 44-717 and

amendments thereto with respect to contributions erroneously collected;

(E) service covered by an arrangement between the secretary and

the agency charged with the administration of any other state or federal

unemployment compensation law pursuant to which all services per-

formed by an individual for an employing unit during the period covered

by such employing unit's duly approved election, are deemed to be per-

formed entirely within the jurisdiction of such other state or federal

agency;

(F) service performed by an individual under the age of 18 in the

delivery or distribution of newspapers or shopping news, not including

delivery or distribution to any point for subsequent delivery or distribu-

tion;

(G) service performed by an individual for an employing unit as an

insurance agent or as an insurance solicitor, if all such service performed

by such individual for such employing unit is performed for remuneration

solely by way of commission;

(H) service performed in any calendar quarter in the employ of any

organization exempt from income tax under section 501(a) of the federal

internal revenue code of 1986 (other than an organization described in

section 401(a) or under section 521 of such code) if the remuneration for

such service is less than $50. In construing the application of the term

``employment,'' if services performed during 1/2 or more of any pay period

by an individual for the person employing such individual constitute em-

ployment, all the services of such individual for such period shall be

deemed to be employment; but if the services performed during more

than 1/2 of any such pay period by an individual for the person employing

such individual do not constitute employment, then none of the services

of such individual for such period shall be deemed to be employment. As

used in this subsection (i)(4)(H) the term ``pay period'' means a period

(of not more than 31 consecutive days) for which a payment of remuner-

ation is ordinarily made to the individual by the person employing such

individual. This subsection (i)(4)(H) shall not be applicable with respect

to services with respect to which unemployment compensation is payable

under an unemployment compensation system established by an act of

congress;

(I) services performed in the employ of a church or convention or

association of churches, or an organization which is operated primarily

for religious purposes and which is operated, supervised, controlled, or

principally supported by a church or convention or association of

churches;

(J) service performed by a duly ordained, commissioned, or licensed

minister of a church in the exercise of such individual's ministry or by a

member of a religious order in the exercise of duties required by such

order;

(K) service performed in a facility conducted for the purpose of car-

rying out a program of:

(i) Rehabilitation for individuals whose earning capacity is impaired

by age or physical or mental deficiency or injury, or

(ii) providing remunerative work for individuals who because of their

impaired physical or mental capacity cannot be readily absorbed in the

competitive labor market, by an individual receiving such rehabilitation

or remunerative work;

(L) service performed as part of an employment work-relief or work-

training program assisted or financed in whole or in part by any federal

agency or an agency of a state or political subdivision thereof or of an

Indian tribe, by an individual receiving such work relief or work training;

(M) service performed by an inmate of a custodial or correctional

institution, unless such service is performed for a private, for-profit em-

ployer;

(N) service performed, in the employ of a school, college, or univer-

sity, if such service is performed by a student who is enrolled and is

regularly attending classes at such school, college or university;

(O) service performed by an individual who is enrolled at a nonprofit

or public educational institution which normally maintains a regular fac-

ulty and curriculum and normally has a regularly organized body of stu-

dents in attendance at the place where its educational activities are carried

on as a student in a full-time program, taken for credit at such institution,

which combines academic instruction with work experience, if such serv-

ice is an integral part of such program, and such institution has so certified

to the employer, except that this subsection (i)(4)(O) shall not apply to

service performed in a program established for or on behalf of an em-

ployer or group of employers;

(P) service performed in the employ of a hospital licensed, certified

or approved by the secretary of health and environment, if such service

is performed by a patient of the hospital;

(Q) services performed as a qualified real estate agent. As used in

this subsection (i)(4)(Q) the term ``qualified real estate agent'' means any

individual who is licensed by the Kansas real estate commission as a sa-

lesperson under the real estate brokers' and salespersons' license act and

for whom:

(i) Substantially all of the remuneration, whether or not paid in cash,

for the services performed by such individual as a real estate salesperson

is directly related to sales or other output, including the performance of

services, rather than to the number of hours worked; and

(ii) the services performed by the individual are performed pursuant

to a written contract between such individual and the person for whom

the services are performed and such contract provides that the individual

will not be treated as an employee with respect to such services for state

tax purposes;

(R) services performed for an employer by an extra in connection

with any phase of motion picture or television production or television

commercials for less than 14 days during any calendar year. As used in

this subsection, the term ``extra'' means an individual who pantomimes in

the background, adds atmosphere to the set and performs such actions

without speaking and ``employer'' shall not include any employer which

is a governmental entity or any employer described in section 501(c)(3)

of the federal internal revenue code of 1986 which is exempt from income

under section 501(a) of the code;

(S) services performed by an oil and gas contract pumper. As used in

this subsection (i)(4)(S), ``oil and gas contract pumper'' means a person

performing pumping and other services on one or more oil or gas leases,

or on both oil and gas leases, relating to the operation and maintenance

of such oil and gas leases, on a contractual basis for the operators of such

oil and gas leases and ``services'' shall not include services performed for

a governmental entity or any organization described in section 501(c)(3)

of the federal internal revenue code of 1986 which is exempt from income

taxation under section 501(a) of the code;

(T) service not in the course of the employer's trade or business per-

formed in any calendar quarter by an employee, unless the cash remu-

neration paid for such service is $200 or more and such service is per-

formed by an individual who is regularly employed by such employer to

perform such service. For purposes of this paragraph, an individual shall

be deemed to be regularly employed by an employer during a calendar

quarter only if:

(i) On each of some 24 days during such quarter such individual per-

forms for such employer for some portion of the day service not in the

course of the employer's trade or business, or

(ii) such individual was regularly employed, as determined under sub-

paragraph (i), by such employer in the performance of such service during

the preceding calendar quarter.

Such excluded service shall not include any services performed for an

employer which is a governmental entity or any employer described in

section 501(c)(3) of the federal internal revenue code of 1986 which is

exempt from income taxation under section 501(a) of the code;

(U) service which is performed by any person who is a member of a

limited liability company and which is performed as a member or manager

of that limited liability company; and

(V) services performed as a qualified direct seller. The term ``direct

seller'' means any person if:

(i) Such person:

(a) is engaged in the trade or business of selling or soliciting the sale

of consumer products to any buyer on a buy-sell basis or a deposit-com-

mission basis for resale, by the buyer or any other person, in the home

or otherwise rather than in a permanent retail establishment; or

(b) is engaged in the trade or business of selling or soliciting the sale

of consumer products in the home or otherwise than in a permanent retail

establishment;

(ii) substantially all the remuneration whether or not paid in cash for

the performance of the services described in subparagraph (i) is directly

related to sales or other output including the performance of services

rather than to the number of hours worked;

(iii) the services performed by the person are performed pursuant to

a written contract between such person and the person for whom the

services are performed and such contract provides that the person will

not be treated as an employee for federal and state tax purposes;

(iv) for purposes of this act, a sale or a sale resulting exclusively from

a solicitation made by telephone, mail, or other telecommunications

method, or other nonpersonal method does not satisfy the requirements

of this subsection; and

(W) service performed as an election official or election worker, if

the amount of remuneration received by the individual during the cal-

endar year for services as an election official or election worker is less

than $1,000.

(j) ``Employment office'' means any office operated by this state and

maintained by the secretary of human resources for the purpose of as-

sisting persons to become employed.

(k) ``Fund'' means the employment security fund established by this

act, to which all contributions and reimbursement payments required and

from which all benefits provided under this act shall be paid and including

all money received from the federal government as reimbursements pur-

suant to section 204 of the federal-state extended compensation act of

1970, and amendments thereto.

(l) ``State'' includes, in addition to the states of the United States of

America, any dependency of the United States, the Commonwealth of

Puerto Rico, the District of Columbia and the Virgin Islands.

(m) ``Unemployment.'' An individual shall be deemed ``unemployed''

with respect to any week during which such individual performs no serv-

ices and with respect to which no wages are payable to such individual,

or with respect to any week of less than full-time work if the wages payable

to such individual with respect to such week are less than such individual's

weekly benefit amount.

(n) ``Employment security administration fund'' means the fund es-

tablished by this act, from which administrative expenses under this act

shall be paid.

(o) ``Wages'' means all compensation for services, including commis-

sions, bonuses, back pay and the cash value of all remuneration, including

benefits, paid in any medium other than cash. The reasonable cash value

of remuneration in any medium other than cash, shall be estimated and

determined in accordance with rules and regulations prescribed by the

secretary. Compensation payable to an individual which has not been

actually received by that individual within 21 days after the end of the

pay period in which the compensation was earned shall be considered to

have been paid on the 21st day after the end of that pay period. Effective

January 1, 1986, gratuities, including tips received from persons other

than the employing unit, shall be considered wages when reported in

writing to the employer by the employee. Employees must furnish a writ-

ten statement to the employer, reporting all tips received if they total $20

or more for a calendar month whether the tips are received directly from

a person other than the employer or are paid over to the employee by

the employer. This includes amounts designated as tips by a customer

who uses a credit card to pay the bill. Notwithstanding the other provi-

sions of this subsection (o), wages paid in back pay awards or settlements

shall be allocated to the week or weeks and reported in the manner as

specified in the award or agreement, or, in the absence of such specificity

in the award or agreement, such wages shall be allocated to the week or

weeks in which such wages, in the judgment of the secretary, would have

been paid. The term ``wages'' shall not include:

(1) That part of the remuneration which has been paid in a calendar

year to an individual by an employer or such employer's predecessor in

excess of $3,000 for all calendar years prior to 1972, $4,200 for the cal-

endar years 1972 to 1977, inclusive, $6,000 for calendar years 1978 to

1982, inclusive, $7,000 for the calendar year 1983, and $8,000 with re-

spect to employment during any calendar year following 1983, except that

if the definition of the term ``wages'' as contained in the federal unem-

ployment tax act is amended to include remuneration in excess of $8,000

paid to an individual by an employer under the federal act during any

calendar year, wages shall include remuneration paid in a calendar year

to an individual by an employer subject to this act or such employer's

predecessor with respect to employment during any calendar year up to

an amount equal to the dollar limitation specified in the federal unem-

ployment tax act. For the purposes of this subsection (o)(1), the term

``employment'' shall include service constituting employment under any

employment security law of another state or of the federal government;

(2) the amount of any payment (including any amount paid by an

employing unit for insurance or annuities, or into a fund, to provide for

any such payment) made to, or on behalf of, an employee or any of such

employee's dependents under a plan or system established by an em-

ployer which makes provisions for employees generally, for a class or

classes of employees or for such employees or a class or classes of em-

ployees and their dependents, on account of (A) sickness or accident

disability, except in the case of any payment made to an employee or such

employee's dependents, this subparagraph shall exclude from the term

``wages'' only payments which are received under a workers compensation

law. Any third party which makes a payment included as wages by reason

of this subparagraph (2)(A) shall be treated as the employer with respect

to such wages, or (B) medical and hospitalization expenses in connection

with sickness or accident disability, or (C) death;

(3) any payment on account of sickness or accident disability, or med-

ical or hospitalization expenses in connection with sickness or accident

disability, made by an employer to, or on behalf of, an employee after the

expiration of six calendar months following the last calendar month in

which the employee worked for such employer;

(4) any payment made to, or on behalf of, an employee or such em-

ployee's beneficiary:

(A) From or to a trust described in section 401(a) of the federal in-

ternal revenue code of 1986 which is exempt from tax under section

501(a) of the federal internal revenue code of 1986 at the time of such

payment unless such payment is made to an employee of the trust as

remuneration for services rendered as such employee and not as a ben-

eficiary of the trust;

(B) under or to an annuity plan which, at the time of such payment,

is a plan described in section 403(a) of the federal internal revenue code

of 1986;

(C) under a simplified employee pension as defined in section

408(k)(1) of the federal internal revenue code of 1986, other than any

contribution described in section 408(k)(6) of the federal internal revenue

code of 1986;

(D) under or to an annuity contract described in section 403(b) of

the federal internal revenue code of 1986, other than a payment for the

purchase of such contract which was made by reason of a salary reduction

agreement whether evidenced by a written instrument or otherwise;

(E) under or to an exempt governmental deferred compensation plan

as defined in section 3121(v)(3) of the federal internal revenue code of

1986;

(F) to supplement pension benefits under a plan or trust described

in any of the foregoing provisions of this subparagraph to take into ac-

count some portion or all of the increase in the cost of living, as deter-

mined by the secretary of labor, since retirement but only if such sup-

plemental payments are under a plan which is treated as a welfare plan

under section 3(2)(B)(ii) of the federal employee retirement income se-

curity act of 1974; or

(G) under a cafeteria plan within the meaning of section 125 of the

federal internal revenue code of 1986;

(5) the payment by an employing unit (without deduction from the

remuneration of the employee) of the tax imposed upon an employee

under section 3101 of the federal internal revenue code of 1986 with

respect to remuneration paid to an employee for domestic service in a

private home of the employer or for agricultural labor;

(6) remuneration paid in any medium other than cash to an employee

for service not in the course of the employer's trade or business;

(7) remuneration paid to or on behalf of an employee if and to the

extent that at the time of the payment of such remuneration it is reason-

able to believe that a corresponding deduction is allowable under section

217 of the federal internal revenue code of 1986 relating to moving ex-

penses;

(8) any payment or series of payments by an employer to an employee

or any of such employee's dependents which is paid:

(A) Upon or after the termination of an employee's employment re-

lationship because of (i) death or (ii) retirement for disability; and

(B) under a plan established by the employer which makes provisions

for employees generally, a class or classes of employees or for such em-

ployees or a class or classes of employees and their dependents, other

than any such payment or series of payments which would have been paid

if the employee's employment relationship had not been so terminated;

(9) remuneration for agricultural labor paid in any medium other than

cash;

(10) any payment made, or benefit furnished, to or for the benefit of

an employee if at the time of such payment or such furnishing it is rea-

sonable to believe that the employee will be able to exclude such payment

or benefit from income under section 129 of the federal internal revenue

code of 1986 which relates to dependent care assistance programs;

(11) the value of any meals or lodging furnished by or on behalf of

the employer if at the time of such furnishing it is reasonable to believe

that the employee will be able to exclude such items from income under

section 119 of the federal internal revenue code of 1986;

(12) any payment made by an employer to a survivor or the estate of

a former employee after the calendar year in which such employee died;

(13) any benefit provided to or on behalf of an employee if at the

time such benefit is provided it is reasonable to believe that the employee

will be able to exclude such benefit from income under section 74(c), 117

or 132 of the federal internal revenue code of 1986; or

(14) any payment made, or benefit furnished, to or for the benefit of

an employee, if at the time of such payment or such furnishing it is rea-

sonable to believe that the employee will be able to exclude such payment

or benefit from income under section 127 of the federal internal revenue

code of 1986 relating to educational assistance to the employee.

Nothing in any paragraph of subsection (o), other than paragraph (1),

shall exclude from the term ``wages'': (1) Any employer contribution un-

der a qualified cash or deferred arrangement, as defined in section 401(k)

of the federal internal revenue code of 1986, to the extent that such

contribution is not included in gross income by reason of section 402(a)(8)

of the federal internal revenue code of 1986; or (2) any amount treated

as an employer contribution under section 414(h)(2) of the federal inter-

nal revenue code of 1986.

Any amount deferred under a nonqualified deferred compensation

plan shall be taken into account for purposes of this section as of the later

of when the services are performed or when there is no substantial risk

of forfeiture of the rights to such amount. Any amount taken into account

as wages by reason of this paragraph, and the income attributable thereto,

shall not thereafter be treated as wages for purposes of this section. For

purposes of this paragraph, the term ``nonqualified deferred compensa-

tion plan'' means any plan or other arrangement for deferral of compen-

sation other than a plan described in subsection (o)(4).

(p) ``Week'' means such period or periods of seven consecutive cal-

endar days, as the secretary may by rules and regulations prescribe.

(q) ``Calendar quarter'' means the period of three consecutive cal-

endar months ending March 31, June 30, September 30 or December

31, or the equivalent thereof as the secretary may by rules and regulations

prescribe.

(r) ``Insured work'' means employment for employers.

(s) ``Approved training'' means any vocational training course or

course in basic education skills approved by the secretary or a person or

persons designated by the secretary.

(t) ``American vessel'' or ``American aircraft'' means any vessel or air-

craft documented or numbered or otherwise registered under the laws

of the United States; and any vessel or aircraft which is neither docu-

mented or numbered or otherwise registered under the laws of the

United States nor documented under the laws of any foreign country, if

its crew performs service solely for one or more citizens or residents of

the United States or corporations organized under the laws of the United

States or of any state.

(u) ``Institution of higher education,'' for the purposes of this section,

means an educational institution which:

(1) Admits as regular students only individuals having a certificate of

graduation from a high school, or the recognized equivalent of such a

certificate;

(2) is legally authorized in this state to provide a program of education

beyond high school;

(3) provides an educational program for which it awards a bachelor's

or higher degree, or provides a program which is acceptable for full credit

toward such a degree, a program of postgraduate or postdoctoral studies,

or a program of training to prepare students for gainful employment in a

recognized occupation; and

(4) is a public or other nonprofit institution.

Notwithstanding any of the foregoing provisions of this subsection (u),

all colleges and universities in this state are institutions of higher educa-

tion for purposes of this section, except that no college, university, junior

college or other postsecondary school or institution which is operated by

the federal government or any agency thereof shall be an institution of

higher education for purposes of the employment security law.

(v) ``Educational institution'' means any institution of higher educa-

tion, as defined in subsection (u) of this section, or any institution, except

private for profit institutions, in which participants, trainees or students

are offered an organized course of study or training designed to transfer

to them knowledge, skills, information, doctrines, attitudes or abilities

from, by or under the guidance of an instructor or teacher and which is

approved, licensed or issued a permit to operate as a school by the state

department of education or other government agency that is authorized

within the state to approve, license or issue a permit for the operation of

a school or to an Indian tribe in the operation of an educational institution.

The courses of study or training which an educational institution offers

may be academic, technical, trade or preparation for gainful employment

in a recognized occupation.

(w) (1) ``Agricultural labor'' means any remunerated service:

(A) On a farm, in the employ of any person, in connection with cul-

tivating the soil, or in connection with raising or harvesting any agricul-

tural or horticultural commodity, including the raising, shearing, feeding,

caring for, training, and management of livestock, bees, poultry, and fur-

bearing animals and wildlife.

(B) In the employ of the owner or tenant or other operator of a farm,

in connection with the operating, management, conservation, improve-

ment, or maintenance of such farm and its tools and equipment, or in

salvaging timber or clearing land of brush and other debris left by a hur-

ricane, if the major part of such service is performed on a farm.

(C) In connection with the production or harvesting of any commod-

ity defined as an agricultural commodity in section (15)(g) of the agri-

cultural marketing act, as amended (46 Stat. 1500, sec. 3; 12 U.S.C. 1141j)

or in connection with the ginning of cotton, or in connection with the

operation or maintenance of ditches, canals, reservoirs or waterways, not

owned or operated for profit, used exclusively for supplying and storing

water for farming purposes.

(D) (i) In the employ of the operator of a farm in handling, planting,

drying, packing, packaging, processing, freezing, grading, storing, or de-

livering to storage or to market or to a carrier for transportation to market,

in its unmanufactured state, any agricultural or horticultural commodity;

but only if such operator produced more than 1/2 of the commodity with

respect to which such service is performed;

(ii) in the employ of a group of operators of farms (or a cooperative

organization of which such operators are members) in the performance

of service described in paragraph (i) above of this subsection (w)(1)(D),

but only if such operators produced more than 1/2 of the commodity with

respect to which such service is performed;

(iii) the provisions of paragraphs (i) and (ii) above of this subsection

(w)(1)(D) shall not be deemed to be applicable with respect to service

performed in connection with commercial canning or commercial freez-

ing or in connection with any agricultural or horticultural commodity after

its delivery to a terminal market for distribution for consumption.

(E) On a farm operated for profit if such service is not in the course

of the employer's trade or business.

(2) ``Agricultural labor'' does not include service performed prior to

January 1, 1980, by an individual who is an alien admitted to the United

States to perform service in agricultural labor pursuant to sections 214(c)

and 101(a)(15)(H) of the federal immigration and nationality act.

(3) As used in this subsection (w), the term ``farm'' includes stock,

dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations,

ranches, nurseries, ranges, greenhouses, or other similar structures used

primarily for the raising of agricultural or horticultural commodities, and

orchards.

(4) For the purpose of this section, if an employing unit does not

maintain sufficient records to separate agricultural labor from other em-

ployment, all services performed during any pay period by an individual

for the person employing such individual shall be deemed to be agricul-

tural labor if services performed during 1/2 or more of such pay period

constitute agricultural labor; but if the services performed during more

than 1/2 of any such pay period by an individual for the person employing

such individual do not constitute agricultural labor, then none of the serv-

ices of such individual for such period shall be deemed to be agricultural

labor. As used in this subsection (w), the term ``pay period'' means a

period of not more than 31 consecutive days for which a payment of

remuneration is ordinarily made to the individual by the person employ-

ing such individual.

(x) ``Reimbursing employer'' means any employer who makes pay-

ments in lieu of contributions to the employment security fund as pro-

vided in subsection (e) of K.S.A. 44-710 and amendments thereto.

(y) ``Contributing employer'' means any employer other than a re-

imbursing employer or rated governmental employer.

(z) ``Wage combining plan'' means a uniform national arrangement

approved by the United States secretary of labor in consultation with the

state unemployment compensation agencies and in which this state shall

participate, whereby wages earned in one or more states are transferred

to another state, called the ``paying state,'' and combined with wages in

the paying state, if any, for the payment of benefits under the laws of the

paying state and as provided by an arrangement so approved by the

United States secretary of labor.

(aa) ``Domestic service'' means any service for a person in the oper-

ation and maintenance of a private household, local college club or local

chapter of a college fraternity or sorority, as distinguished from service

as an employee in the pursuit of an employer's trade, occupation, pro-

fession, enterprise or vocation.

(bb) ``Rated governmental employer'' means any governmental entity

which elects to make payments as provided by K.S.A. 44-710d and

amendments thereto.

(cc) ``Benefit cost payments'' means payments made to the employ-

ment security fund by a governmental entity electing to become a rated

governmental employer.

(dd) ``Successor employer'' means any employer, as described in sub-

section (h) of this section, which acquires or in any manner succeeds to

(1) substantially all of the employing enterprises, organization, trade or

business of another employer or (2) substantially all the assets of another

employer.

(ee) ``Predecessor employer'' means an employer, as described in

subsection (h) of this section, who has previously operated a business or

portion of a business with employment to which another employer has

succeeded.

(ff) ``Lessor employing unit'' means any independently established

business entity which engages in the business of providing leased em-

ployees to a client lessee.

(gg) ``Client lessee'' means any individual, organization, partnership,

corporation or other legal entity leasing employees from a lessor employ-

ing unit.

(hh) ``Qualifying injury'' means a personal injury by accident arising

out of and in the course of employment within the coverage of the Kansas

workers compensation act, K.S.A. 44-501 et seq., and amendments

thereto.

Sec. 2. K.S.A. 44-705 is hereby amended to read as follows: 44-705.

Except as provided by K.S.A. 44-757 and amendments thereto, an un-

employed individual shall be eligible to receive benefits with respect to

any week only if the secretary, or a person or persons designated by the

secretary, finds that:

(a) The claimant has registered for work at and thereafter continued

to report at an employment office in accordance with rules and regula-

tions adopted by the secretary, except that, subject to the provisions of

subsection (a) of K.S.A. 44-704 and amendments thereto, the secretary

may adopt rules and regulations which waive or alter either or both of

the requirements of this subsection (a).

(b) The claimant has made a claim for benefits with respect to such

week in accordance with rules and regulations adopted by the secretary.

(c) The claimant is able to perform the duties of such claimant's cus-

tomary occupation or the duties of other occupations for which the claim-

ant is reasonably fitted by training or experience, and is available for work,

as demonstrated by the claimant's pursuit of the full course of action most

reasonably calculated to result in the claimant's reemployment except

that, notwithstanding any other provisions of this section, an unemployed

claimant otherwise eligible for benefits shall not become ineligible for

benefits because of the claimant's enrollment in and satisfactory pursuit

of approved training, including training approved under section 236(a)(1)

of the trade act of 1974.

For the purposes of this subsection, an inmate of a custodial or cor-

rectional institution shall be deemed to be unavailable for work and not

eligible to receive unemployment compensation while incarcerated.

(d) The claimant has been unemployed for a waiting period of one

week or the claimant is unemployed and has satisfied the requirement

for a waiting period of one week under the shared work unemployment

compensation program as provided in subsection (k)(4) of K.S.A. 44-757

and amendments thereto, which period of one week, in either case, occurs

within the benefit year which includes the week for which the claimant

is claiming benefits. No week shall be counted as a week of unemploy-

ment for the purposes of this subsection (d):

(1) If benefits have been paid for such week;

(2) if the individual fails to meet with the other eligibility require-

ments of this section; or

(3) if an individual is seeking unemployment benefits under the un-

employment compensation law of any other state or of the United States,

except that if the appropriate agency of such state or of the United States

finally determines that the claimant is not entitled to unemployment ben-

efits under such other law, this subsection (d)(3) shall not apply.

(e) For benefit years established on and after the effective date of

this act, the claimant has been paid total wages for insured work in the

claimant's base period of not less than 30 times the claimant's weekly

benefit amount and has been paid wages in more than one quarter of the

claimant's base period, except that the wage credits of an individual

earned during the period commencing with the end of a prior base period

and ending on the date on which such individual filed a valid initial claim

shall not be available for benefit purposes in a subsequent benefit year

unless, in addition thereto, such individual has returned to work and sub-

sequently earned wages for insured work in an amount equal to at least

eight times the claimant's current weekly benefit amount.

(f) The claimant participates in reemployment services, such as job

search assistance services, if the individual has been determined to be

likely to exhaust regular benefits and needs reemployment services pur-

suant to a profiling system established by the secretary, unless the sec-

retary determines that: (1) The individual has completed such services;

or (2) there is justifiable cause for the claimant's failure to participate in

such services.

(g) The claimant is returning to work after a qualifying injury and

has been paid total wages for insured work in the claimant's alternative

base period of not less than 30 times the claimant's weekly benefit amount

and has been paid wages in more than one quarter of the claimant's al-

ternative base period if:

(1) The claimant has filed for benefits within four weeks of being

released to return to work by a licensed and practicing health care pro-

vider.

(2) The claimant files for benefits within 24 months of the date the

qualifying injury occurred.

(3) The claimant attempted to return to work with the employer

where the qualifying injury occurred, but the individual's regular work

or comparable and suitable work was not available.

Sec. 3. K.S.A. 2001 Supp. 44-710 is hereby amended to read as fol-

lows: 44-710. (a) Payment. Contributions shall accrue and become pay-

able by each contributing employer for each calendar year in which the

contributing employer is subject to the employment security law with

respect to wages paid for employment. Such contributions shall become

due and be paid by each contributing employer to the secretary for the

employment security fund in accordance with such rules and regulations

as the secretary may adopt and shall not be deducted, in whole or in part,

from the wages of individuals in such employer's employ. In the payment

of any contributions, a fractional part of $.01 shall be disregarded unless

it amounts to $.005 or more, in which case it shall be increased to $.01.

Should contributions for any calendar quarter be less than $1, no payment

shall be required.

(b) Rates and base of contributions. (1) Except as provided in para-

graph (2) of this subsection, each contributing employer shall pay contri-

butions on wages paid by the contributing employer during each calendar

year with respect to employment as provided in K.S.A. 44-710a and

amendments thereto.

(2) (A) If the congress of the United States either amends or repeals

the Wagner-Peyser act, the federal unemployment tax act, the federal

social security act, or subtitle C of chapter 23 of the federal internal

revenue code of 1986, or any act or acts supplemental to or in lieu thereof,

or any part or parts of any such law, or if any such law, or any part or

parts thereof, are held invalid with the effect that appropriations of funds

by congress and grants thereof to the state of Kansas for the payment of

costs of administration of the employment security law are no longer

available for such purposes, or (B) if employers in Kansas subject to the

payment of tax under the federal unemployment tax act are granted full

credit against such tax for contributions or taxes paid to the secretary of

human resources, then, and in either such case, beginning with the year

in which the unavailability of federal appropriations and grants for such

purpose occurs or in which such change in liability for payment of such

federal tax occurs and for each year thereafter, the rate of contributions

of each contributing employer shall be equal to the total of .5% and the

rate of contributions as determined for such contributing employer under

K.S.A. 44-710a and amendments thereto. The amount of contributions

which each contributing employer becomes liable to pay under this par-

agraph (2) over the amount of contributions which such contributing em-

ployer would be otherwise liable to pay shall be credited to the employ-

ment security administration fund to be disbursed and paid out under the

same conditions and for the same purposes as other moneys are author-

ized to be paid from the employment security administration fund, except

that, if the secretary determines that as of the first day of January of any

year there is an excess in the employment security administration fund

over the amount required to be disbursed during such year, an amount

equal to such excess as determined by the secretary shall be transferred

to the employment security fund.

(c) Charging of benefit payments. (1) The secretary shall maintain a

separate account for each contributing employer, and shall credit the

contributing employer's account with all the contributions paid on the

contributing employer's own behalf. Nothing in the employment security

law shall be construed to grant any employer or individuals in such em-

ployer's service prior claims or rights to the amounts paid by such em-

ployer into the employment security fund either on such employer's own

behalf or on behalf of such individuals. Benefits paid shall be charged

against the accounts of each base period employer in the proportion that

the base period wages paid to an eligible individual by each such employer

bears to the total wages in the base period. Benefits shall be charged to

contributing employers' accounts and rated governmental employers' ac-

counts upon the basis of benefits paid during each twelve-month period

ending on the computation date.

(2) (A) Benefits paid in benefit years established by valid new claims

shall not be charged to the account of a contributing employer or rated

governmental employer who is a base period employer if the examiner

finds that claimant was separated from the claimant's most recent em-

ployment with such employer under any of the following conditions: (i)

Discharged for misconduct or gross misconduct connected with the in-

dividual's work; or (ii) leaving work voluntarily without good cause attrib-

utable to the claimant's work or the employer.

(B) Where base period wage credits of a contributing employer or

rated governmental employer represent part-time employment and the

claimant continues in that part-time employment with that employer dur-

ing the period for which benefits are paid, then that employer's account

shall not be charged with any part of the benefits paid if the employer

provides the secretary with information as required by rules and regula-

tions. For the purposes of this subsection (c)(2)(B), ``part-time employ-

ment'' means any employment when an individual works concurrently for

two or more employers and also works less than full-time for at least one

of those employers because the individual's services are not required for

the customary, scheduled full-time hours prevailing at the work place or

the individual does not customarily work the regularly scheduled full-time

hours due to personal choice or circumstances.

(C) No contributing employer or rated governmental employer's ac-

count shall be charged with any extended benefits paid in accordance

with the employment security law, except for weeks of unemployment

beginning after December 31, 1978, all contributing governmental em-

ployers and governmental rated employers shall be charged an amount

equal to all extended benefits paid.

(D) No contributing employer or rated governmental employer's ac-

count will be charged for benefits paid a claimant while pursuing an ap-

proved training course as defined in subsection (s) of K.S.A. 44-703 and

amendments thereto.

(E) No contributing employer or rated governmental employer's ac-

count shall be charged with respect to the benefits paid to any individual

whose base period wages include wages for services not covered by the

employment security law prior to January 1, 1978, to the extent that the

employment security fund is reimbursed for such benefits pursuant to

section 121 of public law 94-566 (90 Stat. 2673).

(F) With respect to weeks of unemployment beginning after Decem-

ber 31, 1977, wages for insured work shall include wages paid for previ-

ously uncovered services. For the purposes of this subsection (c)(2)(F),

the term ``previously uncovered services'' means services which were not

covered employment, at any time during the one-year period ending De-

cember 31, 1975, except to the extent that assistance under title II of the

federal emergency jobs and unemployment assistance act of 1974 was

paid on the basis of such services, and which:

(i) Are agricultural labor as defined in subsection (w) of K.S.A. 44-

703 and amendments thereto or domestic service as defined in subsection

(aa) of K.S.A. 44-703 and amendments thereto, or

(ii) are services performed by an employee of this state or a political

subdivision thereof, as provided in subsection (i)(3)(E) of K.S.A. 44-703

and amendments thereto, or

(iii) are services performed by an employee of a nonprofit educational

institution which is not an institution of higher education.

(G) No contributing employer or rated governmental employer's ac-

count shall be charged with respect to their pro rata share of benefit

charges if such charges are of $100 or less.

(3) The examiner shall notify any base period employer whose ac-

count will be charged with benefits paid following the filing of a valid

new claim and a determination by the examiner based on all information

relating to the claim contained in the records of the division of employ-

ment. Such notice shall become final and benefits charged to the base

period employer's account in accordance with the claim unless within 10

calendar days from the date the notice was sent, the base period employer

requests in writing that the examiner reconsider the determination and

furnishes any required information in accordance with the secretary's

rules and regulations. In a similar manner, a notice of an additional claim

followed by the first payment of benefits with respect to the benefit year,

filed by an individual during a benefit year after a period in such year

during which such individual was employed, shall be given to any base

period employer of the individual who has requested such a notice within

10 calendar days from the date the notice of the valid new claim was sent

to such base period employer. For purposes of this subsection (c)(3), if

the required information is not submitted or postmarked within a re-

sponse time limit of 10 days after the base period employer notice was

sent, the base period employer shall be deemed to have waived its stand-

ing as a party to the proceedings arising from the claim and shall be barred

from protesting any subsequent decisions about the claim by the secre-

tary, a referee, the board of review or any court, except that the base

period employer's response time limit may be waived or extended by the

examiner or upon appeal, if timely response was impossible due to ex-

cusable neglect. The examiner shall notify the employer of the reconsid-

ered determination which shall be subject to appeal, or further reconsid-

eration, in accordance with the provisions of K.S.A. 44-709 and

amendments thereto.

(4) Time, computation and extension. In computing the period of

time for a base period employer response or appeals under this section

from the examiner's or the special examiner's determination or from the

referee's decision, the day of the act, event or default from which the

designated period of time begins to run shall not be included. The last

day of the period shall be included unless it is a Saturday, Sunday or legal

holiday, in which event the period runs until the end of the next day

which is not a Saturday, Sunday or legal holiday.

(d) Pooled fund. All contributions and payments in lieu of contribu-

tions and benefit cost payments to the employment security fund shall

be pooled and available to pay benefits to any individual entitled thereto

under the employment security law, regardless of the source of such con-

tributions or payments in lieu of contributions or benefit cost payments.

(e) Election to become reimbursing employer; payment in lieu of con-

tributions. (1) Any governmental entity, Indian tribes or tribal units, (sub-

divisions, subsidiaries or business enterprises wholly owned by such In-

dian tribes), for which services are performed as described in subsection

(i)(3)(E) of K.S.A. 44-703 and amendments thereto or any nonprofit or-

ganization or group of nonprofit organizations described in section

501(c)(3) of the federal internal revenue code of 1986 which is exempt

from income tax under section 501(a) of such code, that becomes subject

to the employment security law may elect to become a reimbursing em-

ployer under this subsection (e)(1) and agree to pay the secretary for the

employment security fund an amount equal to the amount of regular

benefits and 1/2 of the extended benefits paid that are attributable to

service in the employ of such reimbursing employer, except that each

reimbursing governmental employer, Indian tribes or tribal units shall

pay an amount equal to the amount of regular benefits and extended

benefits paid for weeks of unemployment beginning after December 31,

1978, for governmental employers and December 21, 2000, for Indian

tribes or tribal units to individuals for weeks of unemployment which

begin during the effective period of such election.

(A) Any employer identified in this subsection (e)(1) may elect to

become a reimbursing employer for a period encompassing not less than

four complete calendar years if such employer files with the secretary a

written notice of such election within the thirty-day period immediately

following January 1 of any calendar year or within the thirty-day period

immediately following the date on which a determination of subjectivity

to the employment security law is issued, whichever occurs later.

(B) Any employer which makes an election to become a reimbursing

employer in accordance with subparagraph (A) of this subsection (e)(1)

will continue to be liable for payments in lieu of contributions until such

employer files with the secretary a written notice terminating its election

not later than 30 days prior to the beginning of the calendar year for

which such termination shall first be effective.

(C) Any employer identified in this subsection (e)(1) which has re-

mained a contributing employer and has been paying contributions under

the employment security law for a period subsequent to January 1, 1972,

may change to a reimbursing employer by filing with the secretary not

later than 30 days prior to the beginning of any calendar year a written

notice of election to become a reimbursing employer. Such election shall

not be terminable by the employer for four complete calendar years.

(D) The secretary 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 January 1 of the year such election is received.

(E) The secretary, in accordance with such rules and regulations as

the secretary may adopt, shall notify each employer identified in subsec-

tion (e)(1) of any determination which the secretary may make of its status

as an employer and of the effective date of any election which it makes

to become a reimbursing employer and of any termination of such elec-

tion. Such determinations shall be subject to reconsideration, appeal and

review in accordance with the provisions of K.S.A. 44-710b and amend-

ments thereto.

(2) Reimbursement reports and payments. Payments in lieu of con-

tributions shall be made in accordance with the provisions of paragraph

(A) of this subsection (e)(2) by all reimbursing employers except the state

of Kansas. Each reimbursing employer shall report total wages paid dur-

ing each calendar quarter by filing quarterly wage reports with the sec-

retary which shall be filed by the last day of the month following the close

of each calendar quarter. Wage reports are deemed filed as of the date

they are placed in the United States mail.

(A) At the end of each calendar quarter, or at the end of any other

period as determined by the secretary, the secretary shall bill each re-

imbursing employer, except the state of Kansas, (i) an amount to be paid

which is equal to the full amount of regular benefits plus 1/2 of the amount

of extended benefits paid during such quarter or other prescribed period

that is attributable to service in the employ of such reimbursing employer;

and (ii) for weeks of unemployment beginning after December 31, 1978,

each reimbursing governmental employer and December 21, 2000, for

Indian tribes or tribal units shall be certified an amount to be paid which

is equal to the full amount of regular benefits and extended benefits paid

during such quarter or other prescribed period that is attributable to

service in the employ of such reimbursing governmental employer.

(B) Payment of any bill rendered under paragraph (A) of this sub-

section (e)(2) shall be made not later than 30 days after such bill was

mailed to the last known address of the reimbursing employer, or oth-

erwise was delivered to such reimbursing employer, unless there has been

an application for review and redetermination in accordance with para-

graph (D) of this subsection (e)(2).

(C) Payments made by any reimbursing employer under the provi-

sions of this subsection (e)(2) shall not be deducted or deductible, in

whole or in part, from the remuneration of individuals in the employ of

such employer.

(D) The amount due specified in any bill from the secretary shall be

conclusive on the reimbursing employer, unless, not later than 15 days

after the bill was mailed to the last known address of such employer, or

was otherwise delivered to such employer, the reimbursing employer files

an application for redetermination in accordance with K.S.A. 44-710b and

amendments thereto.

(E) Past due payments of amounts certified by the secretary under

this section shall be subject to the same interest, penalties and actions

required by K.S.A. 44-717 and amendments thereto. (1) If any non-

profit organization or group of nonprofit organizations described in sec-

tion 501(c)(3) of the federal internal revenue code of 1986 or govern-

mental reimbursing employer is delinquent in making payments of

amounts certified by the secretary under this section, the secretary may

terminate such employer's election to make payments in lieu of contri-

butions as of the beginning of the next calendar year and such termination

shall be effective for such next calendar year and the calendar year there-

after so that the termination is effective for two complete calendar years.

(2) Failure of the Indian tribe or tribal unit to make required payments,

including assessment of interest and penalty within 90 days of receipt of

the bill will cause the Indian tribe to lose the option to make payments

in lieu of contributions as described pursuant to paragraph (e)(1) for the

following tax year unless payment in full is received before contribution

rates for the next tax year are calculated. (3) Any Indian tribe that loses

the option to make payments in lieu of contributions due to late payment

or nonpayment, as described in paragraph (2), shall have such option

reinstated, if after a period of one year, all contributions have been made

on time and no contributions, payments in lieu of contributions for ben-

efits paid, penalties or interest remain outstanding.

(F) Failure of the Indian tribe or any tribal unit thereof to make

required payments, including assessments of interest and penalties, after

all collection activities deemed necessary by the secretary have been ex-

hausted, will cause services performed by such tribe to not be treated as

employment for purposes of subsection (i)(3)(E) of K.S.A. 44-703 and

amendments thereto. If an Indian tribe fails to make payments required

under this section, including assessments of interest and penalties, within

90 days of a final notice of delinquency, the secretary shall immediately

notify the United States internal revenue service and the United States

department of labor. The secretary may determine that any Indian tribe

that loses coverage pursuant to this paragraph may have services per-

formed on behalf of such tribe again deemed ``employment'' if all con-

tributions, payments in lieu of contributions, penalties and interest have

been paid.

(G) In the discretion of the secretary, any employer who elects to

become liable for payments in lieu of contributions and any nonprofit

organization or group of nonprofit organizations described in section 501

(c)(3) of the federal internal revenue code of 1986 or governmental re-

imbursing employer or Indian tribe or tribal unit who is delinquent in

filing reports or in making payments of amounts certified by the secretary

under this section shall be required within 60 days after the effective date

of such election, in the case of an eligible employer so electing, or after

the date of notification to the delinquent employer under this subsection

(e)(2)(G), in the case of a delinquent employer, to execute and file with

the secretary a surety bond, except that the employer may elect, in lieu

of a surety bond, to deposit with the secretary money or securities as

approved by the secretary or to purchase and deliver to an escrow agent

a certificate of deposit to guarantee payment. The amount of the bond,

deposit or escrow agreement required by this subsection (e)(2)(G) shall

not exceed 5.4% of the organization's taxable wages paid for employment

by the eligible employer during the four calendar quarters immediately

preceding the effective date of the election or the date of notification, in

the case of a delinquent employer. If the employer did not pay wages in

each of such four calendar quarters, the amount of the bond or deposit

shall be as determined by the secretary. Upon the failure of an employer

to comply with this subsection (e)(2)(G) within the time limits imposed

or to maintain the required bond or deposit, the secretary may terminate

the election of such eligible employer or delinquent employer, as the case

may be, to make payments in lieu of contributions, and such termination

shall be effective for the current and next calendar year.

(H) The state of Kansas shall make reimbursement payments quar-

terly at a fiscal year rate which shall be based upon: (i) The available

balance in the state's reimbursing account as of December 31 of each

calendar year; (ii) the historical unemployment experience of all covered

state agencies during prior years; (iii) the estimate of total covered wages

to be paid during the ensuing calendar year; (iv) the applicable fiscal year

rate of the claims processing and auditing fee under K.S.A. 75-3798 and

amendments thereto; and (v) actuarial and other information furnished

to the secretary by the secretary of administration. In accordance with

K.S.A. 75-3798 and amendments thereto, the claims processing and au-

diting fees charged to state agencies shall be deducted from the amounts

collected for the reimbursement payments under this paragraph (H) prior

to making the quarterly reimbursement payments for the state of Kansas.

The fiscal year rate shall be expressed as a percentage of covered total

wages and shall be the same for all covered state agencies. The fiscal year

rate for each fiscal year will be certified in writing by the secretary to the

secretary of administration on July 15 of each year and such certified rate

shall become effective on the July 1 immediately following the date of

certification. A detailed listing of benefit charges applicable to the state's

reimbursing account shall be furnished quarterly by the secretary to the

secretary of administration and the total amount of charges deducted

from previous reimbursing payments made by the state. On January 1 of

each year, if it is determined that benefit charges exceed the amount of

prior reimbursing payments, an upward adjustment shall be made there-

for in the fiscal year rate which will be certified on the ensuing July 15.

If total payments exceed benefit charges, all or part of the excess may be

refunded, at the discretion of the secretary, from the fund or retained in

the fund as part of the payments which may be required for the next fiscal

year.

(3) Allocation of benefit costs. The reimbursing account of each re-

imbursing employer shall be charged the full amount of regular benefits

and 1/2 of the amount of extended benefits paid except that each reim-

bursing governmental employer's account shall be charged the full

amount of regular benefits and extended benefits paid for weeks of un-

employment beginning after December 31, 1978, to individuals whose

entire base period wage credits are from such employer. When benefits

received by an individual are based upon base period wage credits from

more than one employer then the reimbursing employer's or reimbursing

governmental employer's account shall be charged in the same ratio as

base period wage credits from such employer bear to the individual's total

base period wage credits. Notwithstanding any other provision of the

employment security law, no reimbursing employer's or reimbursing gov-

ernmental employer's account shall be charged for payments of extended

benefits which are wholly reimbursed to the state by the federal govern-

ment.

(A) Proportionate allocation (when fewer than all reimbursing base

period employers are liable). If benefits paid to an individual are based

on wages paid by one or more reimbursing employers and on wages paid

by one or more contributing employers or rated governmental employers,

the amount of benefits payable by each reimbursing employer shall be

an amount which bears the same ratio to the total benefits paid to the

individual as the total base period wages paid to the individual by such

employer bears to the total base period wages paid to the individual by

all of such individual's base period employers.

(B) Proportionate allocation (when all base period employers are re-

imbursing employers). If benefits paid to an individual are based on wages

paid by two or more reimbursing employers, the amount of benefits pay-

able by each such employer shall be an amount which bears the same

ratio to the total benefits paid to the individual as the total base period

wages paid to the individual by such employer bear to the total base

period wages paid to the individual by all of such individual's base period

employers.

(4) Group accounts. Two or more reimbursing employers may file a

joint application to the secretary for the establishment of a group account

for the purpose of sharing the cost of benefits paid that are attributable

to service in the employment of such reimbursing employers. Each such

application shall identify and authorize a group representative to act as

the group's agent for the purposes of this subsection (e)(4). Upon ap-

proval of the application, the secretary shall establish a group account for

such employers effective as of the beginning of the calendar quarter in

which the secretary receives the application and shall notify the group's

representative of the effective date of the account. Such account shall

remain in effect for not less than four years and thereafter such account

shall remain in effect until terminated at the discretion of the secretary

or upon application by the group. Upon establishment of the account,

each member of the group shall be liable for payments in lieu of contri-

butions with respect to each calendar quarter in the amount that bears

the same ratio to the total benefits paid in such quarter that are attrib-

utable to service performed in the employ of all members of the group

as the total wages paid for service in employment by such member in

such quarter bear to the total wages paid during such quarter for service

performed in the employ of all members of the group. The secretary shall

adopt such rules and regulations as the secretary deems necessary with

respect to applications for establishment, maintenance and termination

of group accounts that are authorized by this subsection (e)(4), for ad-

dition of new members to, and withdrawal of active members from such

accounts, and for the determination of the amounts that are payable un-

der this subsection (e)(4) by members of the group and the time and

manner of such payments.

Sec. 4. K.S.A. 44-705 and K.S.A. 2001 Supp. 44-703 and 44-710 are

hereby repealed.

Sec. 5. This act shall take effect and be in force from and after its

publication in the statute book.

Approved April 23, 2002.


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Date Composed: 10/10/2002 Date Modified: 10/10/2002