Unemployment Insurance Law Summaries
North Dakota, Unemployment Insurance Law Summaries
North Dakota's unemployment insurance law is located in Title 52, 1959 North Dakota Century Code, as amended Secs. 52-01-01 to 52-08-03; and in the Regulations Issued under the North Dakota Unemployment Compensation Law, Articles 27-02 and 27-03. The full text of the law is available at Unemployment Insurance Reports UI-ND ¶4001 .
DEFINITIONS
“Employer” means payment of wages of $1,500 or more in any calendar quarter in either the current or preceding calendar year, or employment of at least one individual for some portion of a day in each of 20 weeks in either the current or preceding calendar year. Generally, an employer subject to the FUTA is also subject to the North Dakota law. Indian tribes are now included in the definition of “employer.”
“Employment” means service, including service in interstate commerce, by any officer of a corporation, or any individual who, under the usual common-law rules for determining the employer-employee relationship, has the status of an employee, with the exceptions listed below. Note, however, that if a corporate officer or manager of a limited liability company is employed by a corporation in which
th or more of the ownership interest is owned or controlled by the officer or manager or his or her parent, child, or spouse, or any combination thereof, the corporation or company, with the concurrence of the officer or manager, may exclude him or her from coverage.
The term “employment” now includes service performed in the employ of an Indian tribe, provided that service is excluded from employment solely by reason of Sec. 3306(c)(7) of the FUTA.
Services by certain agent-drivers or commission-drivers, and by traveling or city salespersons are covered. Services for wages or under any contract of hire are covered employment until it is shown that the individual is an independent contractor as determined by the “common law” test. Service as an officer or member of a crew of an American vessel is covered if management and control of that vessel is in North Dakota.
Agricultural and domestic employers.- Services performed in agricultural labor for an employer who employs 10 or more workers performing such services in 20 weeks in either current or preceding calendar year or pays cash remuneration of $20,000 or more in any calendar quarter of current or preceding calendar year for such services are covered. Service performed prior to January 1, 1980, by certain aliens is excluded. When agricultural labor is provided by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963, or substantially all of the crew members operate or maintain certain tractors or equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer.
Domestic service.- Domestic service in a private home, local college club or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid wages of $1,000 or more for such services in any quarter of current or preceding calendar year.
Generally, employment subject to the FUTA is also subject to the North Dakota law.
“Employee:” Every individual, whether male, female, citizen, alien, or minor performing services in subject employment, including an officer of a corporation.
“Wages:” All remuneration for service from whatever source, including commissions, bonuses, cash value of all remuneration in any medium other than cash, and back pay awards. Gratuities customarily received in course of work from persons other than employer are treated as wages received from employer. Employer contributions under qualified cash or deferred arrangement plans may also be included. The term “wages” does not include the following:
Taxable wage base is determined annually as 70% of the statewide average annual wage (rounded to the nearest $100) determined on or before each October 1. Wage base is $23,700 for 2009. Wage base must be at least as much as the federal taxable wage base.
Other exclusions from wages are listed below.
COVERAGE
Generally, employment subject to the FUTA is also subject to the North Dakota law. Exclusions from coverage are listed below.
Government and nonprofit employers.- Mandatory coverage is required with respect to services performed for state hospitals and state institutions of higher education, and for tax-exempt nonprofit organizations employing four or more individuals for some portion of a day in each of 20 weeks within either the current or preceding calendar year. Most services for the state and its political subdivisions are covered.
Services for the federal government are not covered.
Nonprofit organizations and state hospitals and state institutions of higher education have the option of financing the payment of benefits by the regular contributions method or the reimbursement method, as do Indian tribes.
Nonprofit organizations, Indian tribes and state employees have a choice of the following reimbursement methods:
payments equal to the full amount of regular benefits plus (100%) the extended benefits paid to claimants (state hospitals and state institutions of higher education electing reimbursement financing must use this method), or
a variable percentage based on total payroll.
Under (2), employers are subject to an adjustment to reflect actual benefit costs. An employer that terminates its election to make reimbursement payments is treated as a new employer for purposes of the experience rating provisions.
EXCEPTIONS
Wages.- The term “wages” does not include the following:
Taxable wage base is determined annually as 70% of the statewide average annual wage (rounded to the nearest $100) determined on or before each October 1. Wage base is $22,100 for 2008. Wage base must be at least as much as the federal taxable wage base.
Medical or hospitalization expenses in connection with sickness or accident disability.
Death payments.
Payment under a workers' compensation plan established on account of sickness or accident disability.
Payments made to certain employee annuity contracts.
Payments made under simplified employee pension plans.
Cash value of meals or lodging where excluded under the Internal Revenue Code.
Payment of employees' FICA tax without deduction from wages.
Payments for sickness or accident disability made over six months after separation.
Payments from, to, or under trust or annuity plan exempt from federal income tax.
Noncash remuneration for service not in course of employer's trade or business.
Employment.- The term “employment” does not include the following:
Casual labor, i.e., service not in course of employer's trade or business, if cash remuneration is less than $50 per quarter or employee works on less than 24 days in that or preceding quarter.
Golf caddies under the age of 18, unless the service is performed for the state or a nonprofit organization.
Insurance agents, insurance solicitors, real estate salespersons, or securities salespersons, if performed solely on a commission basis.
Interns and student nurses.
Landmen who negotiate the acquisition or divestiture of mineral rights, along with other related matters such as business agreements for the exploration for or development of minerals, and who are paid on a contractual basis as independent contractors.
Newspaper carriers under 18 years of age.
Organizations exempt from income tax for service performed in calendar quarter if remuneration is not less than $50.
Owner of a general partnership, limited partnership, limited liability partnership, limited liability limited partnership, or limited liability company unless the organization is treated as a corporation for federal taxation purposes.
Relatives, i.e., service performed by individual in employ of son, daughter, or spouse, or by a minor in employ of parent and dwelling in household of parent.
Service covered by federal unemployment compensation system.
Service by student enrolled at nonprofit or public educational institution in full-time work study program. Exemption not applicable if service performed under program established for an employer or group of employers.
Service for a hospital by a patient of the hospital.
Student in employ of school not exempt from income tax. Service by students in employ of school, college, or university where they are enrolled and in attendance; or by spouse of such student if spouse is advised at beginning of employment that such employment is provided under a program to provide financial assistance to the student and is not covered by any program of unemployment insurance.
Voluntary employees' beneficiary associations.
Agricultural and domestic employers.- Service performed prior to January 1, 1980, by certain aliens is excluded.
Government and nonprofit employers.- Most services for the state and its political subdivisions are covered. Services for the federal government are not covered.
Coverage for the state and tax-exempt nonprofit organizations do not include the following:
Church or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work training under program financed by federal agency or an agency of a state or political subdivision.
Inmate of a custodial or penal institution.
Election official or election worker if the amount of remuneration received for the year is less than $1,000.
The following individuals are also excluded:
elected officials;
members of a legislative body or the judiciary;
members of the State National Guard or Air National Guard;
employees serving on a temporary basis in case of certain emergencies; and
individuals in major nontenured policymaking or advisory positions that ordinarily do not require more than eight hours per week.
PROCEDURES
Base period.- First four of the last five completed calendar quarters preceding benefit year.
Benefit year.- 52-week period beginning week insured worker first requests determination of insured status. A subsequent benefit year cannot be established until the expiration of the current benefit year.
Weekly benefit amount.-
of the sum of the individual's total wages for insured work during the two quarters of his or her base period in which such wages were highest, plus one-half of his or her total wages in the third highest quarter of his or her base period. Maximum weekly benefit amount is 62% of the statewide average weekly wage.
If on October 1 of any year the trust fund reserve is equal to or greater than the required amount and if North Dakota's average contribution rate is below the nationwide average for the preceding calendar year, the maximum weekly benefit amount is 65% of the statewide average weekly wage, beginning the next July 1. Maximum effective beginning 7/6/2008 is $406. Minimum weekly benefit amount is $43. Wages (if any) in excess of 60% of weekly benefit amount, computed to next lower multiple of $1, are deducted.
Maximum total benefits.- 12 to 26 times the weekly benefit amount, depending on ratio of total base period wages to high quarter wages. In addition, during certain periods of high unemployment, payment of extended benefits at claimant's weekly benefit amount.
Assignment of benefits: Generally not permitted; however, deductions from benefits are allowed to satisfy child support obligations. In addition, a claimant may elect to withhold federal and state income tax from his or her benefit payment (Sec. 52-06-30).
Benefit eligibility: Requirements-
base period wages of at least 1.5 times total high quarter wages earned in at least two quarters of base period;
serve one-week waiting period;
be able and available for work and actively seeking work;
participate in reemployment services under a worker profiling system if required to do so.
Notwithstanding any availability requirement and disqualification for refusal to accept suitable work, benefits may not be denied to individual in approved training program. Wages earned after end of one base period and before filing of valid claim cannot be used for benefit purposes in new benefit year unless claimant earns 10 times his or her current weekly benefit amount. Claimant not ineligible for failure to comply with above requirements if failure is due to illness or disability not covered by workers' compensation insurance and that occurred after he or she registered for work and no suitable work was offered.
Base period wages used to determine an individual's monetary eligibility may not exceed 10 times his or her weekly benefit amount if he or she is employed by
a partnership and
or more ownership interest in the partnership is or during the employment was owned or controlled, directly or indirectly, by the individual's spouse or child, or by the individual's parent if he or she is under 18, or by a combination of two or more of them; or
a corporation if
or more of the ownership interest, however designated or evidenced, is or during the employment was, owned or controlled, directly or indirectly, by the individual or by his or her spouse or child, or by his or her parent if he or she is under 18, or by a combination of two or more of them.
If at the time of the claim the ownership interest has been ceded, this provision is inapplicable.
Disqualifications-Period.- Voluntary leaving without good cause attributable to the employer-week in which claimant left and thereafter until he or she has earned, in covered employment as remuneration for personal services, eight times his or her weekly benefit amount and has not left his or her most recent work under disqualifying circumstances. No disqualification if claimant leaves work that he or she could have refused as unsuitable, if such work is left within the first 10 weeks, or if he or she leaves or remains away due to illness or injury, under specified conditions. No disqualification if individual leaves work that is 200 road miles or more, on a one-way basis, from his or her home to accept work that is less than 200 miles from home, provided the work is a bona fide job offer with a reasonable expectation of continued employment.
Discharge from most recent work for misconduct in connection with work or refusal without good cause to accept suitable work-week of disqualifying action and until he or she has earned, in covered employment as remuneration for personal services, 10 times his or her weekly benefit amount and has not left his or her last work under disqualifying circumstances.
Discharge for gross misconduct-one year from date of separation.
Partial or total unemployment caused by disciplinary suspension of not more than 30 days for misconduct connected with work -weeks of suspension.
Labor dispute-duration of unemployment due to dispute.
Attending educational institution-weeks of attendance. No disqualification for individual in approved training or for full-time postsecondary student who has earned the majority of his or her wage credits in his or her base period for services performed during weeks in which he or she was attending school as a full-time postsecondary student.
Receipt of unemployment benefits under other state or federal law-period for which payments are made.
Receipt of governmental or other pension, retirement or retired pay, annuity or other similar periodic payment based on claimant's previous work-reduction in weekly benefits by
prorated weekly amount of the pension after deduction of 100% of the pension that is directly attributable to the percentage of the contributions made to the plan by the claimant;
by no part if the entire contribution to the plan was provided by the claimant, or by the claimant and an employer who was not a base period or chargeable employer; or
entire prorated weekly amount of the pension if neither (1) nor (2) applies.
Falsification to obtain benefits-one year.
No benefits payable to instructors, researchers, and principal administrators of educational institutions between school terms or years or during sabbatical leaves. No disqualification for individual employed by an elementary or secondary school operated by the federal government or for individual performing exempt services for the state or a nonprofit organization.
No benefits payable to nonprofessional employees of educational institutions between school terms or years if there is a reasonable assurance of reemployment in the second term or year. Retroactive payment of benefits if, after reasonable assurance is given, there is no opportunity to return to work. No disqualification for individual employed by an elementary or secondary school operated by the federal government or for individual performing exempt services for the state or a nonprofit organization.
The between-terms disqualification of school employees also applies during an established and customary vacation period or holiday recess and to service performed in an educational institution while the individual is in the employ of an educational service agency.
Benefits are not payable to professional athletes for any period between sports seasons or similar periods if there is reasonable assurance that he or she will again perform services in the second season.
Benefits are not payable to an alien unless he or she has been lawfully admitted for permanent residence, is lawfully present for purposes of performing services, or is otherwise permanently residing in the U.S. under color of law.
WHAT THE EMPLOYER MUST DO
Standard rate.- The standard rate is the maximum rate in effect for a year, which may not be less than 5.4%. Construction industry employers must be assigned a negative-balance employer maximum tax rate. New construction employers pay the negative employer maximum rate in effect for the year. No employee tax.
For 2009 positive-balance nonconstruction new employers pay 1.17% and negative-balance nonconstruction new employers pay 6.26%. All construction new employers pay 9.86% in 2009.
Experience rates.- An employer is not eligible for an experience rate for any calendar year until its account has been chargeable with benefits throughout the 36-month period ending on September 30 of the preceding year, except that an employer with insufficient experience to meet these requirements can qualify for a reduced rate if its account has been chargeable throughout a lesser period, but for at least the 12-month period ending on such September 30.
The average required rate needed to pay benefits is the income needed to pay benefits for the calendar year divided by the estimated taxable wages for the calendar year rounded to the next .01%.
The minimum rate for positive employers in the first rate schedule of the table of rate schedules is .01%. The positive employer minimum rate in each subsequent rate schedule is the previous rate schedule's positive employer minimum rate plus 0.1%. The negative employer minimum rate is the positive employer minimum rate plus 6.0%.
A schedule of positive employer rate groups will be established for each year. Each successive rate group must be assigned a rate equal to 120% of the previous group's rate with a minimum increase of 0.1% and a maximum increase of 0.4%. There are ten rate groups in the positive employer schedule. Positive employers will be assigned to the rate in the schedule in the rank order of their reserve ratios, with the highest reserve ratio positive employers assigned to the first positive employer rate. Each successively ranked employer must be assigned to a rate within the schedule so that the first rate within the rate schedule is assigned 60% of the positive employer's prior year's taxable wages and each of the remaining nine rates within the rate schedule are assigned the same proportion of the remaining 40%. A schedule of negative employer rate groups will also be established for each year. Each successive rate group for negative employer rate groups must be assigned a rate equal to the previous group's rate plus 0.4%.
An employer's reserve ratio is the difference between the six-year contributions paid by the employer on or before October 31 of any year, with respect to wages paid by that employer before October 1 of the same year, and the six-year benefits charged to that employer's account before October 1 of the year, divided by the average annual payroll. Employers whose cumulative contributions exceed cumulative benefits must be assigned within the positive employer rate groups and employers whose cumulative contributions are equal to or less than cumulative benefits must be assigned within the negative employer rate groups.
If an employer has a quarterly taxable payroll in excess of $50,000 and at least three times its established average annual payroll or its average annual payroll is zero, and the employer's cumulative lifetime reserve balance is positive, then its tax rate is 150% of the positive employer maximum rate in effect for that year or 1.0%, whichever is greater, beginning with the first day of the quarter in which the condition occurs and for the remainder of the year. If the employer's cumulative lifetime reserve balance is negative, the rate for such employer is the negative employer maximum rate in effect for the year, beginning with the first day of the quarter in which such situation occurs and for the remainder of the year.
Contribution rates for 2009 may be determined from the following schedule:
Positive Balance Account
Reserve Ratio
|
2009Rates
|
|---|
0.60% and less
|
1.30%
|
0.61% to 1.33%
|
1.08%
|
1.34% to 1.93%
|
0.90%
|
1.94% to 2.28%
|
0.75%
|
2.29% to 2.49%
|
0.63%
|
2.50% to 2.64%
|
0.52%
|
2.65% to 2.73%
|
0.44%
|
2.74% to 2.84%
|
0.36%
|
2.85% to 2.93%
|
0.28%
|
2.94% and over
|
0.20%
|
Negative Balance Account
Reserve Ratio
|
2009Rates
|
|---|
-23.61% and less
|
9.86%
|
−23.60% to −15.07%
|
9.46%
|
−15.06% to −9.51%
|
9.06%
|
-9.50% to -5.84%
|
8.66%
|
-5.83% to -2.85%
|
8.26%
|
-2.84% to -1.26%
|
7.86%
|
-1.25% to -0.47%
|
7.46%
|
-0.46% to -0.04%
|
7.06%
|
-0.05% to 2.97%
|
6.66%
|
2.98% and over
|
6.26%
|
Voluntary payments.- May be made within four months (by April 30) after beginning of calendar year.
Incremental bonds.- Incremental bond payments or irrevocable letters of credit may be required from construction employers engaged in any project in North Dakota with an estimated construction cost of at least $50 million, which is planned to be completed or discontinued within seven years. Such payments may be required from projects begun after August 1, 2001. If benefits estimated to be required upon completion of a project exceed estimated contributions to be paid, each employing unit involved will be required to post a bond or irrevocable letter of credit. The amount of the bond or letter of credit must be the difference between the estimated benefits paid and estimated contributions due.
DEADLINES
Tax and wage.- Form SFN-41263, Employer's Contribution and Wage Report, is due quarterly on or before last day of following month. Magnetic media and online filing are available. Government units and eligible nonprofit organizations who have elected the reimbursement method of payment must file Form SFN-19622 quarterly. Those who have chosen the advance method of reimbursement (flat rate method) must file Form SFN-52307.
An employer that employs more than 99 employees at any time shall file contribution and wage reports by an electronic method approved by the bureau beginning with the calendar quarter in which the employer first employs more than 99 employees. An employer that does not comply with the requirements to file reports electronically is deemed to have failed to submit any employer's contribution and wage report as provided in Sec. 52-04-11. All payers making payments on behalf of more than one employer shall make all payments electronically (Ch. 440 (H. 1057), L. 2007, effective for taxable years beginning after December 31, 2007).
ENFORCEMENT
The North Dakota Unemployment Compensation Law is administered by Job Service North Dakota.
If an employer becomes delinquent in the payment of contributions, interest thereon, or penalties or delinquency fees, the amount due may be collected by civil action in the name of the Bureau. Except in the case of a false or fraudulent return or willful failure to file a return with intent to evade contributions, when an assessment may be made or court proceedings for collection begun at any time, such assessment must be made or action for collection brought within six years after the return was filed.
If an employer is a nonresident of North Dakota, or is a foreign corporation doing business in North Dakota, service of the summons may be made upon any of its agents, representatives, or foremen in North Dakota. If none of these persons is available, service upon the Secretary of State constitutes personal service upon such nonresident employer or service may be made in any other manner provided for by law.
In any action for the recovery of delinquent or defaulted contributions, the remedies of garnishment or attachment, or both, are available. No exemptions except absolute exemptions will be allowed against any levy under execution pursuant to such a judgment.
Records.- The Bureau or chairman of any appeal tribunal may require from any employing unit any sworn or unsworn reports, with respect to persons whom it employs, which are deemed necessary for the effective administration of the Act. Information obtained in this manner may not be published or be open to public inspection, other than to public employees in the performance of their public duties, but may be made available to any claimant or his legal representative to the extent necessary for the proper presentation of his claim. Disclosure of any such information otherwise than as provided by the Unemployment Compensation Law, or the use of any list of names so obtained for any political purpose is a misdemeanor punishable by fine or imprisonment, or both. However, upon the request of a state tax commissioner or Workforce Safety and Insurance, the Unemployment Compensation Division may furnish information obtained pursuant to the administration of the law. Such information may be used only for administrative purposes of such tax commissioner or Workforce Safety and Insurance.
WHO TO CONTACT
The North Dakota Unemployment Compensation Law is administered by Job Service North Dakota, 1000 East Divide Avenue, P.O. Box 5507, Bismarck, North Dakota 58506; Telephone (701) 328-2814.
RECORDKEEPING
Every employing unit must keep true and accurate work records, containing such information as the Bureau may prescribe. The records must be kept open to inspection and subject to being copied by the Bureau or its authorized representatives at any reasonable time and as often as may be necessary. Information thus obtained is confidential. Such records must be kept at least five years.
POSTING
Each subject employer is required to maintain posted notices informing workers of its coverage under the Act and of their own benefit rights, and instructing them how to register and file claims. Printed statements of regulations, as supplied by the Bureau, must also be posted and made available to individuals who become unemployed. See ¶35-9900 .
PENALTIES
Interest and penalties.- Contributions unpaid when due bear interest at the rate of 1.5% per month or fraction thereof from the due date. An employer who fails to submit any contribution and wage report by the date due will pay a penalty equal to 5% of the contributions due for each month or fraction of a month until the report is submitted. The penalty for the first month may not be less than $25 and the penalty for subsequent months may not exceed 20% of the contributions due. The maximum penalty imposed may not exceed $250. Penalties may be waived if it is determined that the failure to submit the report timely was caused by circumstances beyond the control of the employer. Interest and penalties so accruing will be collected at the same time, in the same manner, and as a part of contributions.
Violation of any provision of the Act, or of any order, rule or regulation under it, is a Class B misdemeanor unless another penalty is specified in the Act or other applicable statute.
Employers who finance benefits by the reimbursement method and whose payments are past due are subject to the same interest charges and penalties applicable to employers whose contributions are past due.
Personal liability.- Any officer, director, or any employee having 20% ownership interest in a corporation that is a covered employer who has control of, or supervision over and responsibility for, filing contribution reports or making payment of contributions, and who willfully fails to file reports or make contributions as required, is personally liable.
Liens.- When an employer fails to pay contributions, interest, or penalties for which it is liable, the amount of such payments and costs that may accrue is a lien in favor of the state of North Dakota upon all real or personal property and all rights to property belonging to the employer. The lien attaches at the time the payments are due and continues until the liability is satisfied. Job Service North Dakota may also file a certificate, specifying the amount due and the name of the liable employer, with the clerk of the district court in any county, which certificate will be docketed in the same manner as a judgment that directs the payment of money and will be a lien on all the real property in that county, except the homestead, of every person named.
Bankruptcy.- Where an employer's assets are distributed pursuant to a court order under the laws of North Dakota, contributions then or thereafter due must be paid in full prior to all other claims except taxes and claims for wages of not more than $250 to each claimant, earned within four months of the commencement of the proceeding. In the event of an employer's adjudication in bankruptcy, judicially confirmed extension proposal, or composition under the Federal Bankruptcy Reform Act, contributions then or thereafter due are to be entitled to the priority provided in Section 507 of the Bankruptcy Reform Act.
<p>Bankruptcy.— Where an employer's assets are distributed pursuant to a court order under the laws of North Dakota, contributions then or thereafter due must be p</p>
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