2015 -- S 0759

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LC001782

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY

BENEFITS

     Introduced By: Senators Lombardi, Jabour, Conley, Lombardo, and Archambault

     Date Introduced: March 24, 2015

     Referred To: Senate Labor

     (Labor & Training)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 28-42-8 and 28-42-62.1 of the General Laws in Chapter 28-42

entitled "Employment Security - General Provisions" are hereby amended to read as follows:

     28-42-8. Exemptions from "employment". -- "Employment" does not include:

      (1) Domestic service in a private home performed for a person who did not pay cash

remuneration of one thousand dollars ($1,000) or more in any calendar quarter after December

31, 1977, in the current calendar year, or the preceding calendar year to individuals employed in

that domestic service in a private home;

      (2) Service performed by an individual in the employ of a sole proprietorship or LLC

single member filing as a sole proprietorship with the IRS for his or her son, daughter, or spouse,

and service performed by a child under the age of eighteen (18) in the employ of his or her father

or mother who is designated as a sole proprietorship or LLC single-member filing as a sole

proprietorship with the IRS, and service is performed by an individual under the age of eighteen

(18) in the employ of a partnership or LLC partnership consisting only of his or her parents or

domestic partners;

      (3) Service performed in the employ of any other state, or any of its political

subdivisions, the United States government, an instrumentality of any other state or states or their

political subdivisions, or of an instrumentality of the United States, except, that if the Congress of

the United States permits states to require any instrumentalities of the United States to make

payments into an unemployment fund under a state unemployment compensation act, then, to the

extent permitted by Congress, and from and after the date as of which permission becomes

effective, all of the provisions of chapters 42 -- 44 of this title shall be applicable to those

instrumentalities and to services performed for those 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 is not certified by the Secretary of Labor under 26 U.S.C. § 3304 for any

year, then the payments required of those instrumentalities with respect to that year shall be

deemed to have been erroneously collected within the meaning of § 28-43-12 and shall be

refunded by the director from the fund in accordance with § 28-43-12;

      (4) Service performed:

      (i) In the employ of:

      (A) A church or convention or association of churches, or

      (B) An organization that is operated primarily for religious purposes and that is operated,

supervised, controlled, or principally supported by a church or convention or association of

churches;

      (ii) By a duly ordained, commissioned, or licensed minister of a church in the exercise of

his or her ministry or by a member of a religious order in the exercise of duties required by that

order;

      (iii) In a facility conducted for the purpose of carrying out a program of rehabilitation for

individuals whose earning capacity is impaired by age, physical or mental deficiency, or injury or

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

that rehabilitation or remunerative work;

      (iv) As part of an unemployment 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 one of its political

subdivisions, by an individual receiving that work relief or work training;

      (v) In the employ of a hospital by a patient of the hospital; or

      (vi) By an inmate of a custodial or penal institution;

      (5) Service with respect to which unemployment compensation is payable under an

unemployment compensation system established by an act of Congress. The director is authorized

and directed to enter into agreements with the proper agencies under that act of Congress, which

agreements shall become effective ten (10) days after their publication as in the manner provided

in § 28-42-34, to provide reciprocal treatment to individuals who have, after acquiring potential

rights to benefits under chapters 42 -- 44 of this title, acquired rights to unemployment

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compensation under that act of Congress, or who have, after acquiring potential rights to

unemployment compensation under that act of Congress, acquired rights to benefits under those

chapters;

      (6) Service covered by an election duly approved by the agency charged with the

administration of any other state or federal employment security law in accordance with an

arrangement pursuant to § 28-42-58 during the effective period of that election, except as

provided in § 28-42-3(15)(i) 28-42-3(16)(i);

      (7) Services performed by an individual, in any calendar quarter on or after January 1,

1972, in the employ of any organization exempt from income tax under 26 U.S.C. § 501(a)(other

than services performed for an organization defined in § 28-42-3(24) 28-42-3(25) or for any

organization described in 26 U.S.C. § 401(a) or under 26 U.S.C. § 521) if the remuneration for

that service is less than fifty dollars ($50.00);

      (8) Service that is occasional, incidental, and occurs irregularly, and is not in the course

of the employing unit's trade or business. Service for a corporation shall not be excluded;

      (9) Service as a golf caddy, except as to service performed solely for a club with respect

to which the club alone bears the expense. A golf caddy, except as in this specifically provided

subdivision, shall not be construed to be an "employee" as defined in § 28-42-3(14);

      (10) Notwithstanding any provisions of titles 5 and 27, service performed by an

individual as a real estate salesperson if all the service performed by that individual is performed

for remuneration solely by way of commission;

      (11) Notwithstanding any provisions of titles 5 and 27, service performed by an

individual as an insurance broker, agent, or subagent if all the service performed by that

individual is performed for remuneration solely by way of commission. This exemption shall not

apply to service performed as industrial and debit insurance agents;

      (12) Service performed by an individual who is enrolled at a nonprofit or public

educational institution that normally maintains a regular faculty and curriculum and normally has

a regular organized body of students in attendance at the place where its educational activities are

carried on, as a student in a full-time program, taken for credit at that institution that combines

academic instruction with work experience, if that service is an integral part of that program, and

that institution has so certified to the employer, except that this subdivision shall not apply to

service performed in a program established for, or on behalf of, an employer or group of

employers;

      (13) Service performed by an individual on a boat engaged in catching fish or other

forms of aquatic animal life under an arrangement with the owner or operator of that boat

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pursuant to which:

      (i) That individual does not receive any cash remuneration other than a share of the

boat's catch of fish or other forms of aquatic animal life or a share of the proceeds from the sale

of that catch; and

      (ii) The operating crew of that boat is normally made up of fewer than ten (10)

individuals; and

      (14) Services performed by a member of an Americorps program. ; and

     (15) Services performed by a self-employed individual.

     28-42-62.1. Fraud and abuse. -- (a) (1) It shall be unlawful to do any of the following:

      (A) Make or cause to be made any knowingly false or fraudulent material statement or

material representation for the purpose of obtaining or denying any benefits;

      (B) Present or cause to be presented any knowingly false or fraudulent written or oral

material statement in support of, or in opposition to, any claim for benefits or petition regarding

the continuation, termination or modification of benefits;

      (C) Knowingly assist, aid and abet, solicit, or conspire with any person who engages in

an unlawful act under this section;

      (D) Willfully misrepresent or fail to disclose any material fact in order to avoid or reduce

any contribution or other payment required of an employing unit under chapters 42 -- 44 of this

title;

      (E) Willfully fail to report or provide false or misleading information regarding

ownership changes as required by regulations promulgated by the department.

      (F) Willfully make or require any deduction from wages to pay all or any portion of the

contributions required from employers, or try to induce any individual to waive any right under

chapters 42-44 of this title.

      (2) For purposes of this section, "statement" includes, but is not limited to, the receipt of

unemployment benefits deposited to a direct deposit account or electronic payment card, any

endorsement of a benefit check, application for registration, oral or written statement or report,

proof of unemployment, or other documentation offered as proof of, or the absence of,

entitlement to benefits or the amount of benefits.

      (3) If it is determined that any person concealed or knowingly failed to disclose that

which is required by law to be revealed, knowingly gave or used perjured testimony or false

evidence, knowingly made a false statement of fact, participated in the creation or presentation of

evidence which he knows to be false, or otherwise engaged in conduct in violation of this section,

that person shall be guilty of a misdemeanor and subject in criminal proceedings to a fine and/or

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penalty not exceeding one thousand dollars ($1,000), or double the value of the fraud, whichever

is greater, or by imprisonment up to one year in state prison, or both.

      (4) Beginning October 1, 2013, whenever the director establishes that an erroneous

payment was made to an individual due to fraud committed by the individual, that individual will

be assessed a penalty equal to fifteen percent (15%) of the amount of the erroneous payment. All

penalties assessed and collected under this subsection shall be immediately deposited into the

employment security fund.

      (b) The director, in consultation with the attorney general, shall establish a form to give

notice that the endorsement of a benefit check sent or the receipt of unemployment benefits

deposited to a direct deposit account or electronic payment card pursuant to chapter 44 of this title

is the endorser's affirmation that he or she is qualified to receive benefits under the employment

security act. The notice shall be sent to all individuals who are presently receiving benefits and

given to those who file claims for benefits in the future.

     SECTION 2. Sections 28-44-12, 28-44-18 and 28-44-38 of the General Laws in Chapter

28-44 entitled "Employment Security - Benefits" are hereby amended to read as follows:

     28-44-12. Availability and registration for work. -- (a) An individual shall not be

eligible for benefits for any week of his or her partial or total unemployment unless during that

week he or she is physically able to work full-time and be available for full-time work. To prove

availability for work, every individual partially or totally unemployed shall register for work and

shall:

      (1) File a claim for benefits within any time limits, with any frequency, and in any

manner, in person or in writing, as the director may prescribe;

      (2) Respond whenever duly called for work through the employment office; and

      (3) Make an active, independent search for suitable full-time work.

      (b) If an unemployed individual has been determined to be likely to exhaust regular

benefits and to need reemployment services pursuant to a profiling system established by the

director, the individual shall be eligible to receive benefits with respect to any week only if the

individual participates in reemployment services, such as job search assistance services, unless

the director determines that:

      (1) The individual has completed those services; or

      (2) There is justifiable cause for the individual's failure to participate in those services.

     28-44-18. Discharge for misconduct. – (a) For benefit years beginning prior to July 1,

2012, an individual who has been discharged for proved misconduct connected with his or her

work shall become ineligible for waiting period credit or benefits for the week in which that

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discharge occurred and until he or she establishes to the satisfaction of the director that he or she

has, subsequent to that discharge, had at least eight (8) weeks of work, and in each of that eight

(8) weeks has had earnings of at least twenty (20) times the minimum hourly wage as defined in

chapter 12 of this title for performing services in employment for one or more employers subject

to chapters 42 -- 44 of this title. For benefit years beginning on or after July 1, 2012, and prior to

July 6, 2014, an individual who has been discharged for proved misconduct connected with his or

her work shall become ineligible for waiting period credit or benefits for the week in which that

discharge occurred and until he or she establishes to the satisfaction of the director that he or she

has, subsequent to that discharge, had at least eight (8) weeks of work, and in each of that eight

(8) weeks has had earnings greater than, or equal to, his or her weekly benefit rate for performing

services in employment for one or more employers subject to chapters 42 -- 44 of this title. For

benefit years beginning on or after July 6, 2014, an individual who has been discharged for

proved misconduct connected with his or her work shall become ineligible for waiting-period

credit or benefits for the week in which that discharge occurred and until he or she establishes to

the satisfaction of the director that he or she has, subsequent to that discharge, had earnings

greater than, or equal to eight (8) times, his or her weekly benefit rate for performing services in

employment for one or more employers subject to chapters 42 -- 44 of this title. Any individual

who is required to leave his or her work pursuant to a plan, system, or program, public or private,

providing for retirement, and who is otherwise eligible, shall under no circumstances be deemed

to have been discharged for misconduct. If an individual is discharged and a complaint is issued

by the regional office of the National Labor Relations board or the state labor relations board that

an unfair labor practice has occurred in relation to the discharge, the individual shall be entitled to

benefits if otherwise eligible. For the purposes of this section, "misconduct" is defined as

deliberate conduct in willful disregard of the employer's interest, or a knowing violation of a

reasonable and uniformly enforced rule or policy of the employer, provided that such violation is

not shown to be as a result of the employee's incompetence. Notwithstanding any other provisions

of chapters 42 -- 44 of this title, this section shall be construed in a manner that is fair and

reasonable to both the employer and the employed worker.

     (b) For the purposes of chapters 42 through 44 of this title, a suspension without pay from

work shall be treated as a discharge for misconduct and subject to the same conditions as a

discharge for misconduct in accordance with subsection (a) of this section.

     28-44-38. Filing of claims -- Procedures -- Printed copies -- Notices. -- (a) Claims for

waiting period credit and for benefits shall be filed in accordance with regulations adopted as

prescribed. Each employer shall post and maintain printed copies or statements of those

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regulations in places readily accessible to individuals employed by him or her. The director shall

supply each employer with copies of those regulations or statements of the regulations without

cost to the employers.

      (b) The director shall prescribe the type of reports required from employers and the

manner in which the reports shall be presented.

      (c) Upon the filing of a claim, the director shall promptly mail a notice of the filing of

the claim to the claimant's notify the most recent employer and to all employers for whom the

claimant states he or she performed services and earned wages during his or her base period. The

employers shall promptly furnish the information required to determine the claimant's benefit

rights. If the claimant's employer or employers have any information which might affect either

the validity of the claim or the right of the claimant to waiting period credit or benefits, he or she

shall return the notice with that information. If an employer fails without good cause as

established to the satisfaction of the director to return this notice within seven (7) ten (10)

working days of its mailing, the employer shall have no standing to contest any determination to

be made by the director with respect to the claim and any benefit charges pursuant to it, and the

employer shall be barred from being a party to any further proceedings relating to the claim.

Notwithstanding any inconsistent provisions of chapters 42 -- 44 of this title, any employer who

fails to return the notice within that time shall pay a penalty of twenty-five dollars ($25.00) for

each failure. The preceding penalty shall be paid into the employment security tardy account

fund, and if any employer fails to pay the penalty, when assessed, it shall be collected by civil

action as provided in § 28-43-18.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY

BENEFITS

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     This act would exempt services performed by self-employed individuals from the

definitions of employment for employment security benefit purposes. It would also allow

unemployment benefit checks to be directly deposited to an account or through the use of an

electronic payment card. It would clarify the law so that workers that work full-time would be

ineligible for unemployment benefits. Finally, it would render employees who are suspended

without pay from work at the time of their discharge from being eligible for unemployment

benefits.

     This act would take effect upon passage.

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