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Minnesota Legislature

Office of the Revisor of Statutes

HF 374

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 02/27/2019 12:35pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to unemployment insurance; adopting changes recommended by the
Unemployment Insurance Advisory committee in the 2018 legislative session;
amending Minnesota Statutes 2018, sections 268.035, subdivisions 4, 12, 15, 20;
268.044, subdivisions 2, 3; 268.046, subdivision 1; 268.047, subdivision 3; 268.051,
subdivision 2a; 268.057, subdivision 5; 268.069, subdivision 1; 268.07, subdivision
1; 268.085, subdivisions 3, 3a, 13a, by adding subdivisions; 268.095, subdivisions
6, 6a; 268.105, subdivision 6; 268.145, subdivision 1; 268.18, subdivisions 2b, 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL; POLICY

Section 1.

Minnesota Statutes 2018, section 268.035, subdivision 12, is amended to read:


Subd. 12.

Covered employment.

(a) "Covered employment" means deleted text beginthe following unless
excluded as "noncovered employment" under subdivision 20:
deleted text end

deleted text begin (1)deleted text end an employee's entire employment during the calendar quarter if:

deleted text begin (i)deleted text endnew text begin (1) 50 percent or more ofnew text end the employment during the quarter is performed deleted text beginprimarilydeleted text end
in Minnesota;

deleted text begin (ii)deleted text endnew text begin (2) 50 percent or more ofnew text end the employment during the quarter is not performed
deleted text begin primarilydeleted text end in Minnesota or any other statenew text begin, or Canada,new text end but some of the employment is
performed in Minnesota and the deleted text beginbase of operations or the place from which the employment
is directed or controlled is in Minnesota; or
deleted text end

deleted text begin (iii) the employment during the quarter is not performed primarily in Minnesota or any
other state and the base of operations or place from which the employment is directed or
controlled is not in any state where part of the employment is performed, but the
deleted text end employee's
residence is in Minnesotanew text begin during 50 percent or more of the calendar quarternew text end;

deleted text begin (2) an employee's entire employment during the calendar quarter performed within the
United States or Canada, if:
deleted text end

deleted text begin (i) the employment is not covered employment under the unemployment insurance
program of any other state, federal law, or the law of Canada; and
deleted text end

deleted text begin (ii) the place from which the employment is directed or controlled is in Minnesota;
deleted text end

(3) the employment during the deleted text begincalendardeleted text end quarterdeleted text begin,deleted text endnew text begin isnew text end performed deleted text beginentirelydeleted text end outside the United
States and Canada, by an employee who is a United States citizen in the employ of an
American employernew text begin,new text end if the employer's principal place of business in the United States is
located in Minnesota.new text begin For the purposes of this clause,new text end an "American employerdeleted text begin,deleted text end"deleted text begin for the
purposes of this clause, means a corporation organized under the laws of any state, an
individual who is a resident of the United States, or a partnership if two-thirds or more of
the partners are residents of the United States, or a trust, if all of the trustees are residents
of the United States
deleted text endnew text begin is defined under the Federal Unemployment Tax Act, United States
Code title 26, chapter 23, section 3306, subsection (j)(3)
new text end; deleted text beginanddeleted text end new text beginor
new text end

(4) deleted text beginalldeleted text endnew text begin thenew text end employment during the deleted text begincalendardeleted text end quarternew text begin isnew text end performed by an officer or member
of the crew of an American vessel deleted text beginon or in connection with the vessel, if thedeleted text end operatingnew text begin on
navigable waters within, or within and without, the United States, and the
new text end office from which
the operations of the vessel deleted text beginoperating on navigable waters within, or within and without,
the United States are ordinarily and regularly supervised, managed, directed,
deleted text end and controlled
is in Minnesota.

(b) "Covered employment" includes covered agricultural employment under subdivision
11.

(c) For the purposes of section 268.095, "covered employment" includes employment
covered under an unemployment insurance program:

(1) of any other state; deleted text beginor
deleted text end

(2) established by an act of Congressdeleted text begin.deleted text endnew text begin; or
new text end

new text begin (3) the law of Canada.
new text end

new text begin (d) The percentage of employment performed under paragraph (a) is determined by the
amount of hours worked.
new text end

new text begin (e) Covered employment does not include any employment defined as "noncovered
employment" under subdivision 20.
new text end

Sec. 2.

Minnesota Statutes 2018, section 268.035, subdivision 20, is amended to read:


Subd. 20.

Noncovered employment.

"Noncovered employment" means:

(1) employment for the United States government or an instrumentality thereof, including
military service;

(2) employment for a state, other than Minnesota, or a political subdivision or
instrumentality thereof;

(3) employment for a foreign government;

(4) employment covered under the federal Railroad Unemployment Insurance Act;

(5) employment for a church or convention or association of churches, or a nonprofit
organization operated primarily for religious purposes that is operated, supervised, controlled,
or principally supported by a church or convention or association of churches;

(6) employment for an elementary or secondary school with a curriculum that includes
religious education that is operated by a church, a convention or association of churches,
or a nonprofit organization that is operated, supervised, controlled, or principally supported
by a church or convention or association of churches;

(7) employment for Minnesota or a political subdivision, or a nonprofit organization, of
a duly ordained or licensed minister of a church in the exercise of a ministry or by a member
of a religious order in the exercise of duties required by the order;

(8) employment for Minnesota or a political subdivision, or a nonprofit organization, of
an individual receiving rehabilitation of "sheltered" work in a facility conducted for the
purpose of carrying out a program of rehabilitation for individuals whose earning capacity
is impaired by age or physical or mental deficiency or injury or a program providing
"sheltered" work for individuals who because of an impaired physical or mental capacity
cannot be readily absorbed in the competitive labor market. This clause applies only to
services performed in a facility certified by the Rehabilitation Services Branch of the
department or in a day training or habilitation program licensed by the Department of Human
Services;

(9) employment for Minnesota or a political subdivision, or a nonprofit organization, of
an individual receiving work relief or work training as part of an unemployment work relief
or work training program financed in whole or in part by any federal agency or an agency
of a state or political subdivision thereof. This clause does not apply to programs that require
unemployment benefit coverage for the participants;

(10) employment for Minnesota or a political subdivision, as an elected official, a member
of a legislative body, or a member of the judiciary;

(11) employment as a member of the Minnesota National Guard or Air National Guard;

(12) employment for Minnesota or a political subdivision, or instrumentality thereof, of
an individual serving on a temporary basis in case of fire, flood, tornado, or similar
emergency;

(13) employment as an election official or election worker for Minnesota or a political
subdivision, if the compensation for that employment was less than $1,000 in a calendar
year;

(14) employment for Minnesota that is a major policy-making or advisory position in
the unclassified service;

(15) employment for Minnesota in an unclassified position established under section
43A.08, subdivision 1a;

(16) employment for a political subdivision of Minnesota that is a nontenured major
policy making or advisory position;

(17) domestic employment in a private household, local college club, or local chapter
of a college fraternity or sorority, if the wages paid in any calendar quarter in either the
current or prior calendar year to all individuals in domestic employment totaled less than
$1,000.

"Domestic employment" includes all service in the operation and maintenance of a
private household, for a 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 or business;

(18) employment of an individual by a son, daughter, or spouse, and employment of a
child under the age of 18 by the child's father or mother;

(19) employment of an inmate of a custodial or penal institution;

(20) employment for a school, college, or university, by a student who is enrolled and
whose primary relation to the school, college, or university is as a student. This does not
include an individual whose primary relation to the school, college, or university is as an
employee who also takes courses;

(21) employment of an individual who is enrolled as a student in a full-time program at
a nonprofit or public educational institution that maintains a regular faculty and curriculum
and has a regularly organized body of students in attendance at the place where its educational
activities are carried on, taken for credit at the institution, that combines academic instruction
with work experience, if the employment is an integral part of the program, and the institution
has so certified to the employer, except that this clause does not apply to employment in a
program established for or on behalf of an employer or group of employers;

new text begin (22) employment of a foreign college or university student who works on a seasonal or
temporary basis under the J-1 visa summer work travel program described in Code of Federal
Regulations, title 22, section 62.32;
new text end

deleted text begin (22)deleted text endnew text begin (23)new text end employment of university, college, or professional school students in an
internship or other training program with the city of St. Paul or the city of Minneapolis
under Laws 1990, chapter 570, article 6, section 3;

deleted text begin (23)deleted text endnew text begin (24)new text end employment for a hospital by a patient of the hospital. "Hospital" means an
institution that has been licensed by the Department of Health as a hospital;

deleted text begin (24)deleted text endnew text begin (25)new text end employment as a student nurse for a hospital or a nurses' training school by
an individual who is enrolled and is regularly attending classes in an accredited nurses'
training school;

deleted text begin (25)deleted text endnew text begin (26)new text end employment as an intern for a hospital by an individual who has completed a
four-year course in an accredited medical school;

deleted text begin (26)deleted text endnew text begin (27)new text end employment as an insurance salesperson, by other than a corporate officer, if
all the wages from the employment is solely by way of commission. The word "insurance"
includes an annuity and an optional annuity;

deleted text begin (27)deleted text endnew text begin (28)new text end employment as an officer of a township mutual insurance company or farmer's
mutual insurance company under chapter 67A;

deleted text begin (28)deleted text endnew text begin (29)new text end employment of a corporate officer, if the officer directly or indirectly, including
through a subsidiary or holding company, owns 25 percent or more of the employer
corporation, and employment of a member of a limited liability company, if the member
directly or indirectly, including through a subsidiary or holding company, owns 25 percent
or more of the employer limited liability company;

deleted text begin (29)deleted text endnew text begin (30)new text end employment as a real estate salesperson, other than a corporate officer, if all
the wages from the employment is solely by way of commission;

deleted text begin (30)deleted text endnew text begin (31)new text end employment as a direct seller as defined in United States Code, title 26, section
3508;

deleted text begin (31)deleted text endnew text begin (32)new text end employment of 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 distribution;

deleted text begin (32)deleted text endnew text begin (33)new text end casual employment performed for an individual, other than domestic
employment under clause (17), that does not promote or advance that employer's trade or
business;

deleted text begin (33)deleted text endnew text begin (34)new text end employment in "agricultural employment" unless it is "covered agricultural
employment" under subdivision 11; or

deleted text begin (34)deleted text endnew text begin (35)new text end if employment during one-half or more of any pay period was covered
employment, all the employment for the pay period is covered employment; but if during
more than one-half of any pay period the employment was noncovered employment, then
all of the employment for the pay period is noncovered employment. "Pay period" means
a period of not more than a calendar month for which a payment or compensation is ordinarily
made to the employee by the employer.

Sec. 3.

Minnesota Statutes 2018, section 268.051, subdivision 2a, is amended to read:


Subd. 2a.

Unemployment insurance tax deleted text beginlimitsdeleted text endnew text begin reductionnew text end.

(a) If the balance in the trust
fund on December 31 of any calendar year is four percent or more above the amount equal
to an average high cost multiple of 1.0, future unemployment taxes payable must be reduced
by all amounts above 1.0. The amount of tax reduction for any taxpaying employer is the
same percentage of the total amount above 1.0 as the percentage of taxes paid by the
employer during the calendar year is of the total amount of taxes that were paid by all
deleted text begin nonmaximum experience rateddeleted text end employers during the yearnew text begin except taxes paid by employers
assigned a tax rate equal to the maximum experience rating plus the applicable base tax
rate
new text end.

(b) For purposes of this subdivision, "average high cost multiple" has the meaning given
in Code of Federal Regulations, title 20, section 606.3, as amended through December 31,
2015. An amount equal to an average high cost multiple of 1.0 is a federal measure of
adequate reserves in relation to the state's current economy. The commissioner must calculate
and publish, as soon as possible following December 31 of any calendar year, the trust fund
balance on December 31 along with the amount an average high cost multiple of 1.0 equals.
Actual wages paid must be used in the calculation and estimates may not be used.

(c)new text begin The unemployment tax reduction undernew text end this subdivision does not apply to employers
that were deleted text beginatdeleted text endnew text begin assigned a tax rate equal tonew text end the maximum experience ratingnew text begin plus the applicable
base tax rate
new text end for the yeardeleted text begin, nor to high experience rating industry employers under subdivision
5, paragraph (b)
deleted text end. Computations under paragraph (a) are not subject to the rounding
requirement of section 268.034. The refund provisions of section 268.057, subdivision 7,
do not apply.

(d) The unemployment tax reduction under this subdivision applies to taxes paid between
March 1 and December 15 of the year following the December 31 computation under
paragraph (a).

(e) deleted text beginThe amount equal to the average high cost multiple of 1.0 on December 31, 2012,
must be used for the calculation under paragraph (a) but only for the calculation made on
December 31, 2015. Notwithstanding paragraph (d), the tax reduction resulting from the
application of this paragraph applies to unemployment taxes paid between July 1, 2016,
and June 30, 2017.
deleted text endnew text begin If there was an experience rating history transfer under subdivision 4,
the successor employer must receive that portion of the predecessor employer's tax reduction
equal to that portion of the experience rating history transferred. The predecessor employer
retains that portion of tax reduction not transferred to the successor. This paragraph applies
to that portion of the tax reduction that remains unused at the time of notice of acquisition
is provided under subdivision 4, paragraph (e).
new text end

Sec. 4. new text beginEFFECTIVE DATE.
new text end

new text begin Unless otherwise specified, this article is effective October 1, 2020.
new text end

ARTICLE 2

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL; INTEREST

Section 1.

Minnesota Statutes 2018, section 268.057, subdivision 5, is amended to read:


Subd. 5.

Interest on amounts past due.

If any amounts due from an employer under
this chapter or section 116L.20, except late fees under section 268.044, are not received on
the date due deleted text beginthe unpaid balance bearsdeleted text end new text beginthe commissioner must assess interest on any amount
that remains unpaid.
new text endInterest new text beginis assessed new text endat the rate of one percent per month or any part of
a month. new text beginInterest is not assessed on unpaid interest. new text endInterest collected under this subdivision
is credited to the contingent account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2020.
new text end

Sec. 2.

Minnesota Statutes 2018, section 268.18, subdivision 2b, is amended to read:


Subd. 2b.

Interest.

On any unemployment benefits obtained by misrepresentation, and
any penalty amounts assessed under subdivision 2, the commissioner must assess interest
deleted text begin at the rate of one percent per monthdeleted text end on any amount that remains unpaid beginning 30 calendar
days after the date of a determination of overpayment penalty. new text beginInterest is assessed at the
rate of one percent per month or any part of a month.
new text endA determination of overpayment
penalty must state that interest will be assessed. Interest is new text beginnot new text endassessed deleted text beginin the same manner
as on employer debt under section 268.057, subdivision 5
deleted text endnew text begin on unpaid interestnew text end. Interest
deleted text begin paymentsdeleted text end collected under this subdivision deleted text beginaredeleted text endnew text begin isnew text end credited to the trust fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2020.
new text end

ARTICLE 3

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL; BASE PERIODS

Section 1.

Minnesota Statutes 2018, section 268.035, subdivision 4, is amended to read:


Subd. 4.

Base period.

(a) "Base period," unless otherwise provided in this subdivision,
means the most recent four completed calendar quarters before the effective date of an
applicant's application for unemployment benefits if the application has an effective date
occurring after the month following the most recent completed calendar quarter. The base
period under this paragraph is as follows:

If the application for unemployment
benefits is effective on or between these
dates:
The base period is the prior:
February 1 - March 31
January 1 - December 31
May 1 - June 30
April 1 - March 31
August 1 - September 30
July 1 - June 30
November 1 - December 31
October 1 - September 30

(b) If an application for unemployment benefits has an effective date that is during the
month following the most recent completed calendar quarter, then the base period is the
first four of the most recent five completed calendar quarters before the effective date of
an applicant's application for unemployment benefits. The base period under this paragraph
is as follows:

If the application for unemployment
benefits is effective on or between these
dates:
The base period is the prior:
January 1 - January 31
October 1 - September 30
April 1 - April 30
January 1 - December 31
July 1 - July 31
April 1 - March 31
October 1 - October 31
July 1 - June 30

(c) Regardless of paragraph (a), a base period of the first four of the most recent five
completed calendar quarters must be used if the applicant would have more wage credits
under that base period than under a base period of the four most recent completed calendar
quarters.

deleted text begin (d) If the applicant under paragraph (b) has insufficient wage credits to establish a benefit
account, then a base period of the most recent four completed calendar quarters before the
effective date of the applicant's application for unemployment benefits must be used.
deleted text end

deleted text begin (e)deleted text endnew text begin (d)new text end If the applicant has insufficient wage credits to establish a benefit account under
a base period of the four most recent completed calendar quarters, or a base period of the
first four of the most recent five completed calendar quarters, but during either base period
the applicant received workers' compensation for temporary disability under chapter 176
or a similar federal law or similar law of another state, or if the applicant whose own serious
illness caused a loss of work for which the applicant received compensation for loss of
wages from some other source, the applicant may request a base period as follows:

(1) if an applicant was compensated for a loss of work of seven to 13 weeksdeleted text begin,deleted text end new text beginduring a
base period referred to in paragraph (a) or (b), then
new text endthe base period is the first four of the
most recent six completed calendar quarters before the effective date of the application for
unemployment benefits;

(2) if an applicant was compensated for a loss of work of 14 to 26 weeksdeleted text begin,deleted text end new text beginduring a base
period referred to in paragraph (a) or (b), then
new text endthe base period is the first four of the most
recent seven completed calendar quarters before the effective date of the application for
unemployment benefits;

(3) if an applicant was compensated for a loss of work of 27 to 39 weeksdeleted text begin,deleted text end new text beginduring a base
period referred to in paragraph (a) or (b), then
new text endthe base period is the first four of the most
recent eight completed calendar quarters before the effective date of the application for
unemployment benefits; and

(4) if an applicant was compensated for a loss of work of 40 to 52 weeksdeleted text begin,deleted text end new text beginduring a base
period referred to in paragraph (a) or (b), then
new text endthe base period is the first four of the most
recent nine completed calendar quarters before the effective date of the application for
unemployment benefits.

deleted text begin (f)deleted text endnew text begin (e)new text end No base period under this subdivision may include wage credits upon which a
prior benefit account was established.

Sec. 2.

Minnesota Statutes 2018, section 268.07, subdivision 1, is amended to read:


Subdivision 1.

Application for unemployment benefits; determination of benefit
account.

(a) An application for unemployment benefits may be filed in person, by mail, or
by electronic transmission as the commissioner may require. The applicant must be
unemployed at the time the application is filed and must provide all requested information
in the manner required. If the applicant is not unemployed at the time of the application or
fails to provide all requested information, the communication is not an application for
unemployment benefits.

(b) The commissioner must examine each application for unemployment benefits to
determine the base period and the benefit year, and based upon all the covered employment
in the base period the commissioner must determine the weekly unemployment benefit
amount available, if any, and the maximum amount of unemployment benefits available,
if any. The determination, which is a document separate and distinct from a document titled
a determination of eligibility or determination of ineligibility issued under section 268.101,
must be titled determination of benefit account. A determination of benefit account must
be sent to the applicant and all base period employers, by mail or electronic transmission.

(c) If a base period employer did not provide wage detail information for the applicant
as required under section 268.044, deleted text beginor provided erroneous information, or wage detail is not
yet due and the applicant is using a base period under section 268.035, subdivision 4,
paragraph (d),
deleted text end the commissioner may accept an applicant certification of wage credits, based
upon the applicant's records, and issue a determination of benefit account.

deleted text begin (d) An employer must provide wage detail information on an applicant within five
calendar days of request by the commissioner, in a manner and format requested, when:
deleted text end

deleted text begin (1) the applicant is using a base period under section 268.035, subdivision 4, paragraph
(d); and
deleted text end

deleted text begin (2) wage detail under section 268.044 is not yet required to have been filed by the
employer.
deleted text end

deleted text begin (e)deleted text endnew text begin (d)new text end The commissioner may, at any time within 24 months from the establishment of
a benefit account, reconsider any determination of benefit account and make an amended
determination if the commissioner finds that the wage credits listed in the determination
were incorrect for any reason. An amended determination of benefit account must be
promptly sent to the applicant and all base period employers, by mail or electronic
transmission. This subdivision does not apply to documents titled determinations of eligibility
or determinations of ineligibility issued under section 268.101.

deleted text begin (f)deleted text endnew text begin (e)new text end If an amended determination of benefit account reduces the weekly unemployment
benefit amount or maximum amount of unemployment benefits available, any unemployment
benefits that have been paid greater than the applicant was entitled is an overpayment of
unemployment benefits. A determination or amended determination issued under this section
that results in an overpayment of unemployment benefits must set out the amount of the
overpayment and the requirement under section 268.18, subdivision 1, that the overpaid
unemployment benefits must be repaid.

Sec. 3. new text beginEFFECTIVE DATE.
new text end

new text begin Unless otherwise specified, this article is effective January 1, 2020.
new text end

ARTICLE 4

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL; HOUSEKEEPING

Section 1.

Minnesota Statutes 2018, section 268.035, subdivision 15, is amended to read:


Subd. 15.

Employment.

(a) "Employment" means service performed by:

(1) an individual who is an employee under the common law of employer-employee and
not an independent contractor;

(2) an officer of a corporation;

(3) a member of a limited liability company who is an employee under the common law
of employer-employee; deleted text beginor
deleted text end

new text begin (4) an individual who is an employee under the Federal Insurance Contributions Act,
United States Code, title 26, chapter 21, sections 3121 (d)(3)(A) and 3121 (d)(3)(D); or
new text end

deleted text begin (4)deleted text endnew text begin (5)new text end product demonstrators in retail stores or other locations to aid in the sale of
products. The person that pays the wages is the employer.

(b) Employment does not include service as a juror.

(c) Construction industry employment is defined in subdivision 9a. Trucking and
messenger/courier industry employment is defined in subdivision 25b. Rules on determining
worker employment status are described under Minnesota Rules, chapter 3315.

Sec. 2.

Minnesota Statutes 2018, section 268.044, subdivision 2, is amended to read:


Subd. 2.

Failure to timely file report; late fees.

(a) Any employer that fails to submit
the quarterly wage detail report when due must pay a late fee of $10 per employee, computed
based upon the highest of:

(1) the number of employees reported on the last wage detail report submitted;

(2) the number of employees reported in the corresponding quarter of the prior calendar
year; or

(3) if no wage detail report has ever been submitted, the number of employees listed at
the time of employer registration.

The late fee is canceled if the wage detail report is received within 30 calendar days
after a demand for the report is sent to the employer by mail or electronic transmission. A
late fee assessed an employer may not be canceled more than twice each 12 months. The
amount of the late fee assessed may not be less than $250.

(b) If the wage detail report is not received in a manner and format prescribed by the
commissioner within 30 calendar days after demand is sent under paragraph (a), the late
fee assessed under paragraph (a) doubles and a renewed demand notice and notice of the
increased late fee will be sent to the employer by mail or electronic transmission.

(c) Late fees due under this subdivision may be canceled, in whole or in part, under
section deleted text begin268.066 where good cause for late submission is found by the commissionerdeleted text endnew text begin 268.067new text end.

Sec. 3.

Minnesota Statutes 2018, section 268.047, subdivision 3, is amended to read:


Subd. 3.

Exceptions for taxpaying employers.

Unemployment benefits paid will not
be used in computing the future tax rate of a taxpaying base period employer when:

(1) the applicant's wage credits from that employer are less than $500;

(2) the applicant quit the employment, unless it was determined under section 268.095,
to have been because of a good reason caused by the employer or because the employer
notified the applicant of discharge within 30 calendar days. This exception applies deleted text beginonlydeleted text end to
unemployment benefits paid for periods after the applicant's quitting the employmentnew text begin and,
if the applicant is rehired by the employer, continues only until the beginning of the week
the applicant is rehired
new text end; or

(3) the employer discharged the applicant from employment because of employment
misconduct as determined under section 268.095. This exception applies deleted text beginonlydeleted text end to
unemployment benefits paid for periods after the applicant's discharge from employmentnew text begin
and, if the applicant is rehired by the employer, continues only until the beginning of the
week the applicant is rehired
new text end.

Sec. 4.

Minnesota Statutes 2018, section 268.085, subdivision 3, is amended to read:


Subd. 3.

new text beginVacation and sick new text endpayments that delay unemployment benefits.

(a) An
applicant is not eligible to receive unemployment benefits for any week the applicant is
receiving, has received, or will receive vacation pay, sick pay, or personal time off pay, also
known as "PTO."

This paragraph deleted text beginonly applies upon temporary, indefinite, or seasonal separation anddeleted text end does
not apply:

(1) upon a permanent separation from employment; or

(2) to payments from a vacation fund administered by a union or a third party not under
the control of the employer.

deleted text begin Payments under this paragraph are applied to the period immediately following the
temporary, indefinite, or seasonal separation.
deleted text end

deleted text begin (b) An applicant is not eligible to receive unemployment benefits for any week the
applicant is receiving, has received, or will receive severance pay, bonus pay, or any other
payments paid by an employer because of, upon, or after separation from employment.
deleted text end

deleted text begin This paragraph only applies if the payment is:
deleted text end

deleted text begin (1) considered wages under section 268.035, subdivision 29; or
deleted text end

deleted text begin (2) subject to the Federal Insurance Contributions Act (FICA) tax imposed to fund Social
Security and Medicare.
deleted text end

new text begin (b) new text endPayments under this deleted text beginparagraphdeleted text endnew text begin subdivisionnew text end are applied to the period immediately
following the later of the date of separation from employment or the date the applicant first
becomes aware that the employer will be making a payment. The date the payment is actually
made or received, or that an applicant must agree to a release of claims, does not affect the
application of this deleted text beginparagraphdeleted text endnew text begin subdivisionnew text end.

deleted text begin This paragraph does not apply to earnings under subdivision 5, back pay under
subdivision 6, or vacation pay, sick pay, or personal time off pay under paragraph (a).
deleted text end

deleted text begin (c) An applicant is not eligible to receive unemployment benefits for any week the
applicant is receiving, has received, will receive, or has applied for pension, retirement, or
annuity payments from any plan contributed to by a base period employer including the
United States government. The base period employer is considered to have contributed to
the plan if the contribution is excluded from the definition of wages under section 268.035,
subdivision 29
. If the pension, retirement, or annuity payment is paid in a lump sum, an
applicant is not considered to have received a payment if:
deleted text end

deleted text begin (1) the applicant immediately deposits that payment in a qualified pension plan or
account; or
deleted text end

deleted text begin (2) that payment is an early distribution for which the applicant paid an early distribution
penalty under the Internal Revenue Code, United States Code, title 26, section 72(t)(1).
deleted text end

deleted text begin This paragraph does not apply to Social Security benefits under subdivision 4 or 4a.
deleted text end

deleted text begin (d)deleted text endnew text begin (c)new text end This subdivision applies to all the weeks of payment. The number of weeks of
payment is determined as follows:

(1) if the payments are made periodically, the total of the payments to be received is
divided by the applicant's last level of regular weekly pay from the employer; or

(2) if the payment is made in a lump sum, that sum is divided by the applicant's last level
of regular weekly pay from the employer.

deleted text begin For purposes of this paragraph,deleted text endnew text begin Thenew text end "last level of regular weekly pay" includes
commissions, bonuses, and overtime pay if that is part of the applicant's ongoing regular
compensation.

deleted text begin (e)deleted text endnew text begin (d)new text end Under this subdivision, if the payment with respect to a week is equal to or more
than the applicant's weekly unemployment benefit amount, the applicant is ineligible for
benefits for that week. If the payment with respect to a week is less than the applicant's
weekly unemployment benefit amount, unemployment benefits are reduced by the amount
of the payment.

Sec. 5.

Minnesota Statutes 2018, section 268.085, subdivision 3a, is amended to read:


Subd. 3a.

Workers' compensation and disability insurance offset.

(a) An applicant
is not eligible to receive unemployment benefits for any week in which the applicant is
receiving or has received compensation for loss of wages equal to or in excess of the
applicant's weekly unemployment benefit amount under:

(1) the workers' compensation law of this state;

(2) the workers' compensation law of any other state or similar federal law; or

(3) any insurance or trust fund paid in whole or in part by an employer.

(b) This subdivision does not apply to an applicant who has a claim pending for loss of
wages under paragraph (a); however, before unemployment benefits may be paid when a
claim is pending, the issue of the applicant being available for suitable employment, as
required under subdivision 1, clause (4), deleted text beginisdeleted text endnew text begin must benew text end determined under section 268.101,
subdivision 2
. If the applicant later receives compensation as a result of the pending claim,
the applicant is subject to deleted text beginthe provisions ofdeleted text end paragraph (a) and the unemployment benefits
paid are deleted text beginsubject to recoupment by the commissioner to the extent that the compensation
constitutes
deleted text end overpaid unemployment benefitsnew text begin under section 268.18, subdivision 1new text end.

(c) If the amount of compensation described under paragraph (a) for any week is less
than the applicant's weekly unemployment benefit amount, unemployment benefits requested
for that week are reduced by the amount of that compensation payment.

Sec. 6.

Minnesota Statutes 2018, section 268.085, is amended by adding a subdivision to
read:


new text begin Subd. 3b. new text end

new text begin Separation, severance, or bonus payments that delay unemployment
benefits.
new text end

new text begin (a) An applicant is not eligible to receive unemployment benefits for any week
the applicant is receiving, has received, or will receive separation pay, severance pay, bonus
pay, or any other payments paid by an employer because of, upon, or after separation from
employment. This subdivision applies if the payment is:
new text end

new text begin (1) considered wages under section 268.035, subdivision 29; or
new text end

new text begin (2) subject to the Federal Insurance Contributions Act (FICA) tax imposed to fund Social
Security and Medicare.
new text end

new text begin (b) Payments under this subdivision are applied to the period immediately following the
later of the date of separation from employment or the date the applicant first becomes
aware that the employer will be making a payment. The date the payment is actually made
or received, or that an applicant must agree to a release of claims, does not affect the
application of this paragraph.
new text end

new text begin (c) This subdivision does not apply to earnings under subdivision 5, back pay under
subdivision 6, or vacation pay, sick pay, or personal time off pay under subdivision 3.
new text end

new text begin (d) This subdivision applies to all the weeks of payment. The number of weeks of
payment is determined in accordance with subdivision 3, paragraph (c).
new text end

new text begin (e) Under this subdivision, if the payment with respect to a week is equal to or more
than the applicant's weekly unemployment benefit amount, the applicant is ineligible for
benefits for that week. If the payment with respect to a week is less than the applicant's
weekly unemployment benefit amount, unemployment benefits are reduced by the amount
of the payment.
new text end

Sec. 7.

Minnesota Statutes 2018, section 268.085, is amended by adding a subdivision to
read:


new text begin Subd. 3c. new text end

new text begin Pension or retirement payment offset. new text end

new text begin (a) An applicant is not eligible to
receive unemployment benefits for any week the applicant is receiving, has received, will
receive, or has applied for pension, retirement, or annuity payments from any plan contributed
to by a base period employer including the United States government. The base period
employer is considered to have contributed to the plan if the contribution is excluded from
the definition of wages under section 268.035, subdivision 29.
new text end

new text begin (b) If the pension, retirement, or annuity payment is paid in a lump sum, an applicant is
not considered to have received a payment if:
new text end

new text begin (1) the applicant immediately deposits that payment in a qualified pension plan or
account; or
new text end

new text begin (2) that payment is an early distribution for which the applicant paid an early distribution
penalty under the Internal Revenue Code, United Stats Code, title 26, section 72(t)(1).
new text end

new text begin (c) This subdivision does not apply to Social Security benefits under subdivision 4 or
4a.
new text end

new text begin (d) This subdivision applies to all the weeks of payment.
new text end

new text begin If the payment is made in a lump sum, that sum is divided by the applicant's last level
of regular weekly pay from the employer to determine the weeks of payment.
new text end

new text begin The "last level of regular weekly pay" includes commissions, bonuses, and overtime
pay if that is part of the applicant's ongoing regular compensation.
new text end

new text begin (e) Under this subdivision, if the payment with respect to a week is equal to or more
than the applicant's weekly unemployment benefit amount, the applicant is ineligible for
benefits for that week. If the payment with respect to a week is less than the applicant's
weekly unemployment benefit amount, unemployment benefits are reduced by the amount
of the payment.
new text end

Sec. 8.

Minnesota Statutes 2018, section 268.085, subdivision 13a, is amended to read:


Subd. 13a.

Leave of absence.

(a) An applicant on a voluntary leave of absence is
ineligible for unemployment benefits for the duration of the leave of absence. An applicant
on an involuntary leave of absence is not ineligible under this subdivision.

A leave of absence is voluntary when work that the applicant can then perform is available
with the applicant's employer but the applicant chooses not to work. A medical leave of
absence is not presumed to be voluntary.

(b) A period of vacation requested by the applicant, paid or unpaid, is a voluntary leave
of absence. A vacation period assigned by an employer under: (1) a uniform vacation
shutdown; (2) a collective bargaining agreement; or (3) an established employer policy, is
an involuntary leave of absence.

(c) A leave of absence is a temporary stopping of work that has been approved by the
employer. A deleted text beginvoluntarydeleted text end leave of absence is not a quit deleted text beginand an involuntary leave of absencedeleted text end
deleted text begin is notdeleted text endnew text begin ornew text end a discharge from employment deleted text beginfor purposes ofdeleted text endnew text begin.new text end Section 268.095new text begin does not apply to
a leave of absence
new text end.

(d) An applicant who is on a paid leave of absence, whether the leave of absence is
voluntary or involuntary, is ineligible for unemployment benefits for the duration of the
leave.

(e) This subdivision applies to a leave of absence from a base period employer, an
employer during the period between the end of the base period and the effective date of the
benefit account, or an employer during the benefit year.

Sec. 9.

Minnesota Statutes 2018, section 268.095, subdivision 6, is amended to read:


Subd. 6.

Employment misconduct defined.

(a) Employment misconduct means any
intentional, negligent, or indifferent conduct, on the job or off the jobnew text begin,new text end that deleted text begindisplays clearly:
deleted text end

deleted text begin (1)deleted text endnew text begin isnew text end a serious violation of the standards of behavior the employer has the right to
reasonably expect of the employeedeleted text begin; ordeleted text endnew text begin.
new text end

deleted text begin (2) a substantial lack of concern for the employment.
deleted text end

(b) Regardless of paragraph (a), the following is not employment misconduct:

(1) conduct that was a consequence of the applicant's mental illness or impairment;

(2) conduct that was a consequence of the applicant's inefficiency or inadvertence;

(3) simple unsatisfactory conduct;

(4) conduct an average reasonable employee would have engaged in under the
circumstances;

(5) conduct that was a consequence of the applicant's inability or incapacity;

(6) good faith errors in judgment if judgment was required;

(7) absence because of illness or injury of the applicant, with proper notice to the
employer;

(8) absence, with proper notice to the employer, in order to provide necessary care
because of the illness, injury, or disability of an immediate family member of the applicant;

(9) conduct that was a consequence of the applicant's chemical dependency, unless the
applicant was previously diagnosed chemically dependent or had treatment for chemical
dependency, and since that diagnosis or treatment has failed to make consistent efforts to
control the chemical dependency; or

(10) conduct that was a consequence of the applicant, or an immediate family member
of the applicant, being a victim of domestic abuse, sexual assault, or stalking. For the
purposes of this subdivision, "domestic abuse," "sexual assault," and "stalking" have the
meanings given them in subdivision 1.

(c) Regardless of paragraph (b), clause (9), conduct in violation of sections 169A.20,
169A.31, 169A.50 to 169A.53, or 171.177 that deleted text begininterferes with ordeleted text end adversely affects the
employment is employment misconduct.

(d) If the conduct for which the applicant was discharged involved only a single incident,
that is an important fact that must be considered in deciding whether the conduct rises to
the level of employment misconduct under paragraph (a). This paragraph does not require
that a determination under section 268.101 or decision under section 268.105 contain a
specific acknowledgment or explanation that this paragraph was considered.

(e) The definition of employment misconduct provided by this subdivision is exclusive
and no other definition applies.

Sec. 10.

Minnesota Statutes 2018, section 268.095, subdivision 6a, is amended to read:


Subd. 6a.

Aggravated employment misconduct defined.

(a) deleted text beginFor the purpose of this
section, "aggravated employment misconduct" means:
deleted text end

deleted text begin (1)deleted text end The commission of any act, on the job or off the job, that would amount to a gross
misdemeanor or felony new text beginis aggravated employment misconduct new text endif the act deleted text beginsubstantially
interfered with the employment or
deleted text end had a significant adverse effect on the employmentdeleted text begin; ordeleted text endnew text begin.
new text end

new text begin A criminal charge or conviction is not necessary to determine aggravated employment
misconduct under this paragraph. If an applicant is convicted of a gross misdemeanor or
felony, the applicant is presumed to have committed the act.
new text end

deleted text begin (2)deleted text end new text begin(b) new text endFor an employee of a facility as defined in section 626.5572, aggravated
employment misconduct includes an act of patient or resident abuse, financial exploitation,
or recurring or serious neglect, as defined in section 626.5572 and applicable rules.

deleted text begin (b) If an applicant is convicted of a gross misdemeanor or felony for the same act for
which the applicant was discharged, it is aggravated employment misconduct if the act
substantially interfered with the employment or had a significant adverse effect on the
employment.
deleted text end

(c) The definition of aggravated employment misconduct provided by this subdivision
is exclusive and no other definition applies.

Sec. 11. new text beginEFFECTIVE DATE.
new text end

new text begin Unless otherwise specified, this article is effective October 1, 2019.
new text end

ARTICLE 5

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL; TECHNICAL

Section 1.

Minnesota Statutes 2018, section 268.044, subdivision 3, is amended to read:


Subd. 3.

Missing or erroneous information.

(a) Any employer that submits the wage
detail report, but fails to include all new text beginrequired new text endemployee information or enters erroneous
information, is subject to an administrative service fee of $25 for each employee for whom
the information is partially missing or erroneous.

(b) Any employer that submits the wage detail report, but fails to include an employee,
is subject to an administrative service fee equal to two percent of the total wages for each
employee for whom the information is completely missing.

(c) An administrative service fee under this subdivision must be canceled new text beginunder section
268.067
new text endif the commissioner determines that the failure or error by the employer occurred
because of ignorance or inadvertence.

Sec. 2.

Minnesota Statutes 2018, section 268.046, subdivision 1, is amended to read:


Subdivision 1.

Tax accounts assigned.

(a) Any person that contracts with a taxpaying
employer to have that person obtain the taxpaying employer's workforce and provide workers
to the taxpaying employer for a fee is, as of the effective date of the contract, assigned for
the duration of the contract the taxpaying employer's account under section 268.045. That
tax account must be maintained by the person separate and distinct from every other tax
account held by the person and identified in a manner prescribed by the commissioner. The
tax account is, for the duration of the contract, considered that person's account for all
purposes of this chapter. The workers obtained from the taxpaying employer and any other
workers provided by that person to the taxpaying employer, including officers of the
taxpaying employer as defined in section 268.035, subdivision 20, clause deleted text begin(28)deleted text endnew text begin (29)new text end, whose
wages paid by the person are considered paid in covered employment under section 268.035,
subdivision 24
, for the duration of the contract between the taxpaying employer and the
person, must, under section 268.044, be reported on the wage detail report under that tax
account, and that person must pay any taxes due at the tax rate computed for that account
under section 268.051, subdivision 2.

(b) Any workers of the taxpaying employer who are not covered by the contract under
paragraph (a) must be reported by the taxpaying employer as a separate unit on the wage
detail report under the tax account assigned under paragraph (a). Taxes and any other
amounts due on the wages reported by the taxpaying employer under this paragraph may
be paid directly by the taxpaying employer.

(c) If the taxpaying employer that contracts with a person under paragraph (a) does not
have a tax account at the time of the execution of the contract, an account must be registered
for the taxpaying employer under section 268.042 and the new employer tax rate under
section 268.051, subdivision 5, must be assigned. The tax account is then assigned to the
person as provided for in paragraph (a).

(d) A person that contracts with a taxpaying employer under paragraph (a) must, within
30 calendar days of the execution or termination of a contract, notify the commissioner by
electronic transmission, in a format prescribed by the commissioner, of that execution or
termination. The taxpaying employer's name, the account number assigned, and any other
information required by the commissioner must be provided by that person.

(e) Any contract subject to paragraph (a) must specifically inform the taxpaying employer
of the assignment of the tax account under this section and the taxpaying employer's
obligation under paragraph (b). If there is a termination of the contract, the tax account is,
as of the date of termination, immediately assigned to the taxpaying employer.

Sec. 3.

Minnesota Statutes 2018, section 268.069, subdivision 1, is amended to read:


Subdivision 1.

Requirements.

The commissioner must pay unemployment benefits
from the trust fund to an applicant who has met each of the following requirements:

(1) the applicant has filed an application for unemployment benefits and established a
benefit account in accordance with section 268.07;

(2) the applicant has not been held ineligible for unemployment benefits under section
268.095 because of a quit or discharge;

(3) the applicant has met all of the ongoing eligibility requirements under section 268.085;

(4) the applicant does not have an outstanding overpayment of unemployment benefits,
including any penalties or interest; and

(5) the applicant has not been held ineligible for unemployment benefits under section
268.183 deleted text beginbecause of a false representation or concealment of factsdeleted text end.

Sec. 4.

Minnesota Statutes 2018, section 268.105, subdivision 6, is amended to read:


Subd. 6.

Representation; fees.

(a) In any proceeding under subdivision 1 or 2, an
applicant or employer may be represented by any authorized representative.

Except for services provided by an attorney-at-law, no person may charge an applicant
a fee of any kind for advising, assisting, or representing an applicant in a hearing deleted text beginordeleted text endnew text begin,new text end on
reconsiderationnew text begin, or in a proceeding under subdivision 7new text end.

(b) An applicant may not be charged fees, costs, or disbursements of any kind in a
proceeding before an unemployment law judge, the Minnesota Court of Appeals, or the
Supreme Court of Minnesota.

(c) No attorney fees may be awardednew text begin, or costs or disbursements assessed,new text end against the
department as a result of any proceedings under this section.

Sec. 5.

Minnesota Statutes 2018, section 268.145, subdivision 1, is amended to read:


Subdivision 1.

Notification.

(a) Upon filing an application for unemployment benefits,
the applicant must be informed that:

(1) unemployment benefits are subject to federal and state income tax;

(2) there are requirements for filing estimated tax payments;

(3) the applicant may elect to have federal income tax withheld from unemployment
benefits;

(4) if the applicant elects to have federal income tax withheld, the applicant may, in
addition, elect to have Minnesota state income tax withheld; and

(5) at any time during the benefit year the applicant may change a prior election.

(b) If an applicant elects to have federal income tax withheld, the commissioner must
deduct ten percent for federal income tax. If an applicant also elects to have Minnesota state
income tax withheld, the commissioner must make an additional five percent deduction for
state income tax. Any deleted text beginamountsdeleted text endnew text begin amountnew text end deducted deleted text beginor offsetdeleted text end underdeleted text begin sections 268.155, 268.18,
and 268.184 have
deleted text endnew text begin section 268.085 hasnew text end priority over any amounts deducted under this section.
Federal income tax withholding has priority over state income tax withholding.

(c) An election to have income tax withheld may not be retroactive and only applies to
unemployment benefits paid after the election.

Sec. 6.

Minnesota Statutes 2018, section 268.18, subdivision 5, is amended to read:


Subd. 5.

Remedies.

(a) Any method undertaken to recover an overpayment of
unemployment benefits, including any penalties and interest, is not an election of a method
of recovery.

(b) Intervention or lack thereof, in whole or in part, in a workers' compensation matter
under section 176.361 is not an election of a remedy and does not prevent the commissioner
from determining an applicant ineligible for unemployment benefits deleted text beginor taking action under
section 268.183
deleted text end.

Sec. 7. new text beginREVISOR INSTRUCTION.
new text end

new text begin The revisor of statutes is instructed to make the following changes in Minnesota Statutes:
new text end

new text begin (1) delete the term "bona fide" wherever it appears in section 268.035;
new text end

new text begin (2) replace the term "under" with "subject to" in section 268.047, subdivision 2, clause
(8);
new text end

new text begin (3) replace the term "displays clearly" with "shows" in chapter 268;
new text end

new text begin (4) replace the term "entire" with "hearing" in section 268.105; and
new text end

new text begin (5) replace "24 calendar months" with "eight calendar quarters" in section 268.052,
subdivision 2.
new text end

Sec. 8. new text beginEFFECTIVE DATE.
new text end

new text begin Unless otherwise specified, this article is effective October 1, 2019.
new text end