Ala. Admin. Code r. 480-4-2-.20

Current through Register Vol. 43, No. 1, October 31, 2024

Section 480-4-2-.20 - Successorship Or Merger Of Non-Profit Employers

(1) When two non-profit employers merge, one being a Contributing employer (NT) and the other a reimbursing employer (NR) and the surviving entity is the contributing employer, the following will occur:

(a) The surviving entity will remain in its contributory status so long as it elects to do so under the provision of Code of Ala. 1975, § 25-4-51(a)(3).

(b) The wage records of the merging reimbursing employer prior to the merger will be changed to reflect the change from a reimbursing to contributory account.

(c) The employment experience of the merging account will be combined with and considered in computing the tax rate for the surviving entity at the next rate computation time.

(d) Benefit costs in connection with any claim being paid at the time of the merger based on wages with the reimbursing employer prior to the merger will be continued on a reimbursable basis and will be the responsibility of the surviving entity.

(e) Any claim filed after the effective date of the merger will be handled as if the wages had been earned with a contributory employer.

(2) When two or more non-profit employers merge and at least one of the merging employers is a contributing employer and the surviving entity is a reimbursing employer, the following will occur:

(a) The surviving entity will remain in its reimbursing status so long as it elects to do so under the provisions of Code of Ala. 1975, § 25-4-51(a)(3).

(b) The wage records of the merging contributory employer prior to the merger will be changed to reflect the change from the contributory to reimbursing account.

(c) The employment experience of the merging contributory account will be flagged for inclusion in the rate computation in the event the reimbursing employer later terminates its option as provided in Code of Ala. 1975, § 25-4-51(a)(3) b.

(d) Any claim which is based upon benefit wages earned with the contributory employer in current payment status at the time of the merger will be charged to the surviving employer.

(3) If two or more non-profit employers, regardless of benefit financing, are absorbed into a third, newly established organization, that organization shall be considered liable under the successorship clauses, but shall be given the initial option of benefit financing as if it were a newly liable, non-profit employer.

Author: Curtis C. Hall

Ala. Admin. Code r. 480-4-2-.20

Effective September 30, 1982.

Statutory Authority:Code of Ala. 1975, §§ 25-2-7, 25-2-8 and 25-4-111.