Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 65-S.F.No. 1270 
           An act relating to unemployment compensation; making 
          various technical corrections; amending Minnesota 
          Statutes 1988, sections 268.04, subdivisions 12 and 
          25; 268.06, subdivisions 1, 8a, and 28; 268.07, 
          subdivisions 2 and 3; 268.09, subdivision 1; 268.10, 
          subdivisions 1 and 2; 268.12, subdivision 12; 268.16, 
          subdivision 4; 268.162, subdivision 1; 268.163, 
          subdivision 1; and 268.165, subdivisions 1 and 2. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 268.04, 
subdivision 12, is amended to read: 
    Subd. 12.  "Employment" means:  (1) Any service performed, 
including service in interstate commerce, by; 
    (a) any officer of any corporation; 
    (b) any individual who performs services for remuneration 
for any person as an agent-driver or commission-driver engaged 
in distributing meat products, vegetable products, fruit 
products, bakery products, beverages (other than milk), or 
laundry or dry-cleaning services, for a principal, or as a 
traveling or city salesperson, other than as an agent-driver or 
commission-driver, engaged upon a full-time basis in the 
solicitation on behalf of, and the transmission to, a principal 
(except for sideline sales activities on behalf of some other 
person) of orders from wholesalers, retailers, contractors, or 
operators of hotels, restaurants, or other similar 
establishments for merchandise for resale or supplies for use in 
their business operations; or 
    (c) any individual who is a servant under the law of master 
and servant or who performs services for any employing unit, 
unless such services are performed by an independent contractor. 
    Provided, that for purposes of clause (1)(b), the term 
"employment" shall include services described above only if the 
contract of service contemplates that substantially all of the 
services are to be performed personally by such individual, the 
individual does not have a substantial investment in facilities 
used in connection with the performance of the services (other 
than in facilities for transportation), and the services are not 
in the nature of a single transaction that is not part of a 
continuing relationship with the person for whom the services 
are performed. 
     (2) The term "employment" shall include an individual's 
entire service, performed within or both within and without this 
state if (a) the service is localized in this state; or (b) the 
service is not localized in any state but some of the service is 
performed in this state and (1) the base of operations, or, if 
there is no base of operations, then the place from which such 
service is directed or controlled, is in this state; or (2) the 
base of operations or place from which such service is directed 
or controlled is not in any state in which some part of the 
service is performed, but the individual's residence is in this 
state. 
     (3) Service shall be deemed to be localized within a state 
if (a) the service is performed entirely within such state; or 
(b) the service is performed both within and without such state, 
but the service performed without such state is incidental to 
the individual's service within the state, for example, is 
temporary or transitory in nature or consists of isolated 
transactions. 
     (4) The term "employment" shall include an individual's 
service wherever performed within the United States or Canada, 
if 
     (a) such service is not covered under the unemployment 
compensation law of any other state or Canada, and 
     (b) the place from which the service is directed or 
controlled is in this state. 
     (5) (a) Service covered by an election pursuant to section 
268.11, subdivision 3; and 
     (b) service covered by an arrangement pursuant to section 
268.13 between the commissioner and the agency charged with the 
administration of any other state or federal employment security 
law, pursuant to which all service performed by an individual 
for an employing unit is deemed to be performed entirely within 
this state, shall be deemed to be employment if the commissioner 
has approved an election of the employing unit for which such 
service is performed, pursuant to which the entire service of 
such individual during the period covered by such election is 
deemed to be employment. 
     (6) Notwithstanding any inconsistent provisions of sections 
268.03 to 268.24, the term "employment" shall include any 
services which are performed by an individual with respect to 
which an employing unit is liable for any federal tax against 
which credit may be taken for contributions required to be paid 
into a state unemployment compensation fund or which as a 
condition for full tax credit against the tax imposed by the 
Federal Unemployment Tax Act is required to be covered under 
this law. 
    (7) Service performed by an individual in the employ of the 
state of Minnesota or any instrumentality which is wholly owned 
by the state of Minnesota or in the employ of this state and one 
or more other states or an instrumentality of this state and one 
or more of its political subdivisions or an instrumentality of 
this state and another state or an instrumentality of this state 
and one or more political subdivisions of another state if such 
service is excluded from "employment" as defined by section 
3306(c)(7) of the Federal Unemployment Tax Act and is not 
excluded from "employment" under clause (10). 
    (8) Service performed by an individual in the employ of any 
political subdivision of the state of Minnesota or 
instrumentality thereof or an instrumentality of two or more 
political subdivisions of this state or any instrumentality of a 
political subdivision of this state and another state or 
political subdivisions of another state if such service is 
excluded from "employment" as defined by section 3306(c)(7) of 
the Federal Unemployment Tax Act and is not excluded from 
"employment" under clause (10). 
    (a) The provisions of section 268.08, subdivision 6, shall 
apply to service covered by this section. 
    (b) The amounts required to be paid in lieu of 
contributions by any political subdivision shall be billed and 
payment made as provided in section 268.06, subdivision 28, 
clause (2), with respect to similar payments by nonprofit 
organizations. 
    (9) Service performed by an individual in the employ of a 
religious, charitable, educational or other organization but 
only if the following conditions are met: 
    (a) the service is excluded from "employment" as defined in 
the Federal Unemployment Tax Act solely by reason of section 
3306(c)(8) of that act; and 
    (b) the organization had one or more individuals in 
employment for some portion of a day in each of 20 different 
weeks, whether or not such weeks were consecutive, within either 
the current or preceding calendar year, regardless of whether 
they were employed at the same moment of time. 
    (10) For the purposes of clauses (7), (8), and (9), the 
term "employment" does not apply to service performed 
    (a) in the employ of a church or convention or association 
of churches, or an organization which is operated primarily for 
religious purposes and which is operated, supervised, 
controlled, or principally supported by a church or convention 
or association of churches; or 
    (b) by a duly ordained, commissioned, 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 such 
order; or 
     (c) 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 remunerative work for individuals 
who because of an impaired physical or mental capacity cannot be 
readily absorbed in the competitive labor market, by an 
individual receiving the rehabilitation or remunerative work.  
This exclusion applies only to services performed in a facility 
which is certified by the Minnesota department of jobs and 
training, division of rehabilitative services or in day training 
and habilitation programs licensed by the department of human 
services, and is limited to the effective period of the 
certificate or license; or 
     (d) 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 political subdivision thereof, 
by an individual receiving such work relief or work training.  
This exclusion shall not apply to programs that provide for and 
require unemployment insurance coverage for the participants; or 
     (e) by an inmate of a custodial or penal institution; or 
     (f) in the employ of governmental entities referred to in 
clauses (7) and (8) if such service is performed by an 
individual in the exercise of duties 
     (i) as an elected official, 
     (ii) as a member of a legislative body, or a member of the 
judiciary, 
     (iii) as a member of the Minnesota national guard or air 
national guard, 
     (iv) as an employee serving only on a temporary basis in 
case of fire, storm, snow, earthquake, flood or similar 
emergency, 
     (v)(a) in a position with the state of Minnesota which is a 
major nontenured policy making or advisory position in the 
unclassified service, or 
     (b) a policy making position with the state of Minnesota or 
a political subdivision the performance of the duties of which 
ordinarily does not require more than eight hours per week; or 
     (c) in a position with a political subdivision which is a 
major nontenured policy making or advisory position. 
     (11) The term "employment" shall include the service of an 
individual who is a citizen of the United States, performed 
outside the United States, except in Canada, in the employ of an 
American employer (other than service which is deemed 
"employment" under the provisions of clause (2), (3), or (4) or 
the parallel provisions of another state's law) if: 
     (a) The employer's principal place of business in the 
United States is located in this state; or 
     (b) The employer has no place of business in the United 
States, but the employer is an individual who is a resident of 
this state, or the employer is a corporation which is organized 
under the laws of this state, or the employer is a partnership 
or a trust and the number of partners or trustees who are 
residents of this state is greater than the number who are 
residents of any one other state; or 
     (c) None of the criteria of clauses (a) and (b) is met but 
the employer has elected coverage in this state, or the employer 
having failed to elect coverage in any state, the individual has 
filed a claim for benefits, based on such service, under the law 
of this state. 
     (d) An "American employer," for the purposes of this 
subdivision, means a person who is 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, or a corporation organized under the laws of the United 
States or of any state; 
     (e) As used in this subdivision, the term "United States" 
includes the states, the District of Columbia, the Commonwealth 
of Puerto Rico, and the Virgin Islands. 
     (12) Notwithstanding clause (2), all service performed by 
an officer or member of the crew of an American vessel on or in 
connection with such vessel, if the operating office, from which 
the operations of such vessel operating on navigable waters 
within, or within and without, the United States are ordinarily 
and regularly supervised, managed, directed, and controlled is 
within this state. 
    (13) Service performed by an individual in agricultural 
labor as defined in clause (15)(a) when: 
    (a) Such service is performed for a person who: 
    (i) during any calendar quarter in either the current or 
the preceding calendar year paid wages of $20,000 or more to 
individuals employed in agricultural labor, or 
    (ii) for some portion of a day in each of 20 different 
calendar weeks, whether or not such weeks were consecutive, in 
either the current or preceding calendar year employed in 
agricultural labor four or more individuals regardless of 
whether they were employed at the same time. 
    (b) For the purpose of this clause (13) any individual who 
is a member of a crew furnished by a crew leader to perform 
service in agricultural labor for any other person shall be 
treated as an employee of the crew leader: 
    (i) if the crew leader holds a valid certificate of 
registration under the Farm Labor Contractor Registration Act of 
1963, as amended Migrant and Seasonal Agricultural Worker 
Protection Act; or substantially all of the members of the crew 
operate or maintain tractors, mechanized harvesting or crop 
dusting equipment, or any other mechanized equipment, which is 
provided by the crew leader; and 
    (ii) if the individual is not an employee of another person 
as determined by clause (1). 
     (c) For the purpose of this clause (13) in the case of any 
individual who is furnished by a crew leader to perform service 
in agricultural labor for any other person and who is not 
treated as an employee of the crew leader under subclause 
(13)(b): 
     (i) such other person and not the crew leader shall be 
treated as the employer of such individual; and 
     (ii) such other person shall be treated as having paid 
wages to such individual in an amount equal to the amount of 
wages paid to such individual by the crew leader (either on the 
crew leader's behalf or on behalf of such other person) for the 
service in agricultural labor performed for such other person. 
     (d) For the purposes of this clause (13) the term "crew 
leader" means an individual who: 
     (i) furnishes individuals to perform service in 
agricultural labor for any other person, 
     (ii) pays (either on the crew leader's own behalf or on 
behalf of such other person) the individuals so furnished by the 
crew leader for the service in agricultural labor performed by 
them, and 
     (iii) has not entered into a written agreement with such 
other person under which such furnished individual is designated 
as an employee of such other person. 
     (e) For the purposes of this clause (13) services performed 
by an officer or shareholder of a family farm corporation shall 
be excluded from agricultural labor and employment unless said 
corporation is an employer as defined in section 3306(a)(2) of 
the Federal Unemployment Tax Act. 
     (f) For the purposes of this clause (13), services 
performed by an individual 16 years of age or under shall be 
excluded from agricultural labor and employment unless the 
employer is an employer as defined in section 3306(a)(2) of the 
Federal Unemployment Tax Act. 
     (14) Domestic service in a private home, local college 
club, or local chapter of a college fraternity or sorority 
performed for a person who paid wages of $1,000 or more in any 
calendar quarter in either the current or preceding calendar 
year to individuals employed in domestic service. 
     "Domestic service" includes all service for an individual 
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, occupation, profession, 
enterprise, or vocation. 
     (15) The term "employment" shall not include: 
     (a) Agricultural labor.  Service performed by an individual 
in agricultural labor, except as provided in clause (13).  The 
term "agricultural labor" includes all services performed: 
     (1) On a farm, in the employ of any person or family farm 
corporation, in connection with cultivating the soil, or in 
connection with raising or harvesting any agricultural or 
horticultural commodity, including the raising, shearing, 
feeding, caring for, training, and management of livestock, 
bees, poultry, fur-bearing animals and wildlife; 
     (2) In the employ of the owner or tenant or other operator 
of a farm, in connection with the operation, management, 
conservation, improvement, or maintenance of such farm and its 
tools and equipment, or in salvaging timber or clearing land of 
brush and other debris left by a tornadic-like storm, if the 
major part of such service is performed on a farm; 
     (3) In connection with the production or harvesting of any 
commodity defined as an agricultural commodity in section 15(g) 
of the Agricultural Marketing Act, as amended (46 Statutes 1550, 
section 3; United States Code, title 12, section 1141j) or in 
connection with the ginning of cotton, or in connection with the 
operation or maintenance of ditches, canals, reservoirs, or 
waterways, not owned or operated for profit, used exclusively 
for supplying and storing water for farming purposes; 
     (4) In the employ of the operator of a farm in handling, 
planting, drying, packing, packaging, processing, freezing, 
grading, storing, or delivering to storage or to market or to a 
carrier for transportation to market, in its unmanufactured 
state, any agricultural or horticultural commodity; but only if 
such operator produced more than one-half of the commodity with 
respect to which such service is performed, or in the employ of 
a group of operators of farms (or a cooperative organization of 
which such operators are members) in the performance of service 
described herein, but only if such operators produced more than 
one-half of the commodity with respect to which such service is 
performed; however, the provisions of this paragraph shall not 
be deemed to be applicable with respect to service performed in 
connection with commercial canning or commercial freezing or in 
connection with any agricultural or horticultural commodity 
after its delivery to a terminal market for distribution for 
consumption; or 
     (5) On a farm operated for profit if such service is not in 
the course of the employer's trade or business. 
     As used herein, the term "farm" includes stock, dairy, 
poultry, fruit, fur-bearing animal, and truck farms, 
plantations, ranches, nurseries, ranges, greenhouses or other 
similar structures used primarily for the raising of 
agricultural or horticultural commodities, and orchards. 
     (b) Casual labor not in the course of the employing unit's 
trade or business; 
     (c) Service performed on the navigable waters of the United 
States as to which this state is prohibited by the constitution 
and laws of the United States of America from requiring 
contributions of employers with respect to wages as provided in 
sections 268.03 to 268.24; 
     (d) Service performed by an individual in the employ of a 
son, daughter, or spouse, and service performed by a child under 
the age of 18 in the employ of the child's father or mother; 
     (e) Service performed in the employ of the United States 
government, or any instrumentality of the United States exempt 
under the constitution of the United States from the 
contributions imposed by sections 268.03 to 268.24, except that 
with respect to such service and to the extent that the congress 
of the United States shall permit states to require any 
instrumentalities of the United States to make payments into an 
unemployment compensation fund under a state unemployment 
compensation act; then, to the extent permitted by congress, and 
from and after the date as of which such permission becomes 
effective, all of the provisions of these sections shall be 
applicable to such instrumentalities and to services performed 
for such instrumentalities in the same manner, to the same 
extent, and on the same terms as to all other employers, 
employing units, individuals, and services; provided, that if 
this state shall not be certified for any year by the United 
States Department of Labor under section 3304(c) of the federal 
Internal Revenue Code, the payments required of such 
instrumentalities with respect to such year shall be refunded by 
the commissioner from the fund in the same manner and within the 
same period as is provided in section 268.16, subdivision 6, 
with respect to contributions erroneously collected; 
     (f) Service with respect to which unemployment compensation 
is payable under an unemployment compensation system established 
by an act of Congress; 
     (g)(1) Service performed in any calendar quarter in the 
employ of any organization exempt from income tax under section 
501(a) (other than an organization described in section 401(a)) 
or section 521 of the federal Internal Revenue Code, if the 
remuneration for such service is less than $50; or 
     (2) Service performed in the employ of a school, college, 
or university, if such service is performed by a student who is 
enrolled and is regularly attending classes at such school, 
college, or university; or 
     (3) Service performed by an individual who is enrolled at a 
nonprofit or public educational institution which normally 
maintains a regular faculty and curriculum and normally has a 
regularly 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 such institution, which 
combines academic instruction with work experience, if such 
service is an integral part of such program, and such 
institution has so certified to the employer, except that this 
paragraph shall not apply to service performed in a program 
established for or on behalf of an employer or group of 
employers; 
     (h) Service performed in the employ of a foreign government 
(including service as a consular or other officer or employee or 
a nondiplomatic representative); 
     (i) Service performed in the employ of an instrumentality 
wholly owned by a foreign government, if 
     (1) The service is of a character similar to that performed 
in foreign countries by employees of the United States 
government or of an instrumentality thereof; and 
     (2) The commissioner finds that the United States Secretary 
of State has certified to the United States Secretary of the 
Treasury that the foreign government, with respect to whose 
instrumentality exemption is claimed, grants an equivalent 
exemption with respect to similar service performed in the 
foreign country by employees of the United States government and 
of instrumentalities thereof. 
     (j) Service covered by an arrangement between the 
commissioner and the agency charged with the administration of 
any other state or federal employment security law pursuant to 
which all services performed by an individual for an employing 
unit during the period covered by such employing unit's duly 
approved election, are deemed to be performed entirely within 
such agency's state; 
     (k) Service performed in the employ of a hospital, if such 
service is performed by a patient of the hospital, as defined in 
clause (17); 
     (l) Service performed as a student nurse in the employ of a 
hospital or a nurses' training school by an individual who is 
enrolled and is regularly attending classes in a nurses' 
training school chartered and approved pursuant to state law; 
and service performed as a medical or dental an intern, or 
resident in training in the employ of a hospital, clinic, or 
medical or dental office by an individual who has completed a 
four years' course in a medical or dental school chartered and 
approved pursuant to state law; 
    (m) Service performed by an individual other than a 
corporate officer, for a person as an insurance agent or as an 
insurance solicitor, if all such service performed by such 
individual for such person is performed for remuneration solely 
by way of commission (the word "insurance" as used in this 
subdivision shall include an annuity and an optional annuity); 
    (n) Service performed by an individual under the age of 18 
in the delivery or distribution of newspapers or shopping news, 
not including delivery or distribution to any point for 
subsequent delivery or distribution; 
    (o) Service performed by an individual other than a 
corporate officer, for a person as a real estate salesperson, if 
all such service performed by such individual for such person is 
performed for remuneration solely by way of commission; 
    (p) If the service performed during one-half or more of any 
pay period by an individual for the person employing the 
individual constitutes employment, all the service of such 
individual for such period shall be deemed to be employment; but 
if the service performed during more than one-half of any such 
pay period by an individual for the person employing the 
individual does not constitute employment, then none of the 
service of such individual for such period shall be deemed to be 
employment.  As used in this subdivision, the term "pay period" 
means a period (of not more than 31 consecutive days) a calendar 
month for which a payment or remuneration is ordinarily made to 
the individual by the person employing the individual. 
    (q) Services performed for a state, other than the state of 
Minnesota, or an instrumentality wholly owned by such other 
state or political subdivision of such other state; 
    (r) Services performed as a direct seller as defined in 
United States Code, title 26, section 3508.  
    (16) "Institution of higher education," for the purposes of 
this chapter, means an educational institution which: 
    (a) Admits as regular students only individuals having a 
certificate of graduation from a high school, or the recognized 
equivalent of such a certificate; 
    (b) Is legally authorized in this state to provide a 
program of education beyond high school; 
    (c) Provides an educational program for which it awards a 
bachelor's or higher degree, or provides a program which is 
acceptable for credit toward such a degree, a program of 
postgraduate or postdoctoral studies, or a program of training 
to prepare students for gainful employment in a recognized 
occupation; and 
     (d) Is a public or other nonprofit institution. 
     (e) Notwithstanding any of the foregoing provisions of this 
clause, all colleges and universities in this state are 
institutions of higher education for purposes of this section. 
     (17) "Hospital" means an institution which has been 
licensed, certified or approved by the department of health as a 
hospital. 
    Sec. 2.  Minnesota Statutes 1988, section 268.04, 
subdivision 25, is amended to read: 
    Subd. 25.  [WAGES.] "Wages" means all remuneration for 
services, including commissions; bonuses; back pay as of the 
date of payment; tips and gratuities paid to an employee by a 
customer of an employer and accounted for by the employee to the 
employer; sickness and accident disability payments, except as 
otherwise provided in this subdivision; and the cash value of 
all remuneration in any medium other than cash, except that such 
term shall not include: 
     (a) For the purpose of determining contributions payable 
under section 268.06, subdivision 2, that part of the 
remuneration which exceeds, for each calendar year, the greater 
of $7,000 or that part of the remuneration which exceeds 60 
percent of the average annual wage rounded to the nearest $100 
computed in accordance with the provisions of clause (j), paid 
to an individual by an employer or the employer's predecessor 
with respect to covered employment in this state or under the 
unemployment compensation law of any other state.  Credit for 
remuneration reported under the unemployment compensation law of 
another state is limited to that state's taxable wage base.  If 
the term "wages" as contained in the Federal Unemployment Tax 
Act is amended to include remuneration in excess of the amount 
required to be paid hereunder to an individual by an employer 
under the federal act for any calendar year, wages for the 
purposes of sections 268.03 to 268.24 shall include remuneration 
paid in a calendar year up to an amount equal to the dollar 
limitation specified in the Federal Unemployment Tax Act.  For 
the purposes of this clause, the term "employment" shall include 
service constituting employment under any employment security 
law of another state or of the federal government; 
     (b) The amount of any payment made to, or on behalf of, an 
employee under a plan or system established by an employer which 
makes provision for employees generally or for a class or 
classes of employees (including any amount paid by an employer 
for insurance or annuities, or into a fund, to provide for any 
such payment), on account of (1) retirement or (2) medical and 
hospitalization expenses in connection with sickness or accident 
disability, or (3) death, provided the employee has not the 
option to receive, instead of provision for such death benefit, 
any part of such payment, or if such death benefit is insured, 
any part of the premium (or contributions to premiums) paid by 
the employer and has not the right, under the provisions of the 
plan or system or policy of insurance providing for such death 
benefit, to assign such benefit, or to receive a cash 
consideration in lieu of such benefit either upon withdrawal 
from the plan or system providing for such benefit or upon 
termination of such plan or system or policy of insurance or of 
employment with such employer; 
     (c) The payment by an employer (without deduction from the 
remuneration of the employee) (1) of the tax imposed upon an 
employee under section 3101 of the federal Internal Revenue 
Code, or (2) of any payment required from an employee under a 
state unemployment compensation law, with respect to 
remuneration paid to an employee for domestic service in a 
private home of the employer or for agricultural labor; 
     (d) Any payments made to a former employee during the 
period of active military service in the armed forces of the 
United States by such employer, whether legally required or not; 
     (e) Any payment made to, or on behalf of, an employee or 
beneficiary (1) from or to a trust described in section 401(a) 
of the federal Internal Revenue Code which is exempt from tax 
under section 501(a) of such code at the time of such payment 
unless such payment is made to an employee of the trust as 
remuneration for services rendered as an employee and not as a 
beneficiary of the trust, or (2) under or to an annuity plan 
which, at the time of such payment is a plan described in 
section 403(a) of the federal Internal Revenue Code; 
     (f) Sickness or accident disability payments made by the 
employer after the expiration of six calendar months following 
the last calendar month in which the individual worked for the 
employer; 
     (g) Disability payments made under the provisions of any 
workers' compensation law; 
    (h) Sickness or accident disability payments made by a 
third party payer such as an insurance company; 
    (i) Payments made into a fund, or for the purchase of 
insurance or an annuity, to provide for sickness or accident 
disability payments to employees pursuant to a plan or system 
established by the employer which provides for the employer's 
employees generally or for a class or classes of employees; 
    (j) On or before July 1 of each year the commissioner shall 
determine the average annual wage paid by employers subject to 
sections 268.03 to 268.24 in the following manner: 
    (1) The sum of the total monthly employment reported for 
the previous calendar year shall be divided by 12 to determine 
the average monthly employment; 
    (2) The sum of the total wages reported for the previous 
calendar year shall be divided by the average monthly employment 
to determine the average annual wage. 
    The average annual wage determined shall be effective for 
the calendar year next succeeding the determination; 
    (k) Nothing in this subdivision, other than clause (a), 
shall exclude from the term "wages" any payment made under any 
type of salary reduction agreement, including payments made 
under a cash or deferred arrangement and cafeteria plan, as 
defined in sections 401(k) and 125(d) 125, respectively, of the 
federal Internal Revenue Code, to the extent that the employee 
has the option to receive the payment in cash. 
    Sec. 3.  Minnesota Statutes 1988, section 268.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PAYMENTS.] (1) Contributions shall accrue 
and become payable by each employer for each calendar year in 
which the employer is subject to sections 268.03 to 268.24 with 
respect to wages paid (as defined in section 268.04, subdivision 
25 25a) for employment.  Such contributions shall become due and 
be paid by each employer to the department of jobs and training 
for the fund in accordance with such rules as the commissioner 
may prescribe, and shall not be deducted, in whole or in part, 
from the wages of individuals in such employer's employ.  No 
rule of the commissioner shall be put in force which will permit 
the payment of such contributions at a time or under conditions 
which will not allow the employer to take credit for such 
contribution against the tax imposed by section 3301 of the 
Internal Revenue Code. 
    (2) In the payment of any contribution, a fractional part 
of a cent shall be disregarded unless it amounts to one-half 
cent or more in which case it shall be increased to one cent. 
    (3) When the contribution rate applied to an employer's 
taxable payroll for any given calendar quarter results in a 
computed contribution of less than $1, the contribution shall be 
disregarded. 
    Sec. 4.  Minnesota Statutes 1988, section 268.06, 
subdivision 8a, is amended to read: 
    Subd. 8a.  [SOLVENCY ASSESSMENT.] (a) If the fund balance 
is greater than $75,000,000 but less than $150,000,000 on June 
30 of any year, a solvency assessment will be in effect for the 
following calendar year.  Each employer, except those making 
payments in lieu of contributions under subdivisions 25, 26, 27, 
and 28, shall pay a quarterly solvency assessment of ten percent 
multiplied by the contributions paid or due and payable for each 
calendar quarter in that year.  Quarterly contributions and the 
solvency assessment payments shall be combined and will be 
computed notwithstanding the maximum rate established in 
subdivision 3a or 8, by multiplying the quarterly taxable 
payroll by the assigned contribution rate multiplied by 1.10. 
    (b) If the fund balance is less than $75,000,000 on June 30 
of any year, a solvency assessment will be in effect for the 
following calendar year.  Each employer, except those making 
payments in lieu of contributions under subdivisions 25, 26, 27, 
and 28, shall pay a quarterly solvency assessment of 15 percent 
multiplied by the contributions paid or due and payable for each 
calendar quarter in that year.  Quarterly contributions and the 
solvency assessment payments shall be combined and will be 
computed notwithstanding the maximum rate established in 
subdivision 3a or 8, by multiplying the quarterly taxable 
payroll by the assigned contribution rate multiplied by 
1.15 rounded to the nearest one-hundredth of a percent.  
    Sec. 5.  Minnesota Statutes 1988, section 268.06, 
subdivision 28, is amended to read: 
    Subd. 28.  [PAYMENT TO FUND BY NONPROFIT CORPORATION AND 
ALLOCATION OF BENEFIT COSTS BY BASE PERIOD REIMBURSERS.] (1) 
Benefits paid to employees of nonprofit organizations shall be 
financed in accordance with the provisions of this subdivision.  
For the purpose of this subdivision, a nonprofit organization is 
an organization (or group of organizations) described in section 
501(c)(3) of the United States Internal Revenue Code which is 
exempt from income tax under section 501(a) of such code.  Any 
nonprofit organization which, pursuant to section 268.04, 
subdivision 10, clause (9) is, or becomes, subject to this law 
on or after January 1, 1972, shall pay contributions under the 
provisions of section 268.06, subdivision 1, unless it elects, 
in accordance with this paragraph, to pay to the commissioner 
for the unemployment fund an amount equal to the amount of 
regular benefits and the state share of the extended benefits 
charged, that is attributable to service in the employ of such 
nonprofit organization, to individuals for weeks of unemployment 
which begin during the effective period of such election. 
     (a) Any nonprofit organization which becomes subject to 
this law after January 1, 1972, may elect to become liable for 
payments in lieu of contributions for a period of not less than 
two calendar years beginning with the date on which such 
subjectivity begins by filing a written notice of its election 
with the commissioner not later than 30 days immediately 
following the date of the determination of such subjectivity. 
    (b) Any nonprofit organization which makes an election in 
accordance with clause (a) or clause (b) will continue to be 
liable for payments in lieu of contributions until it files with 
the commissioner a written notice terminating its election not 
later than 30 days prior to the beginning of the calendar year 
for which such termination shall first be effective. 
    (c) Any nonprofit organization which has been paying 
contributions under this law for a period subsequent to January 
1, 1972, may change to a reimbursable basis by filing with the 
commissioner not later than 30 days prior to the beginning of 
any calendar year a written notice of election to become liable 
for payments in lieu of contributions.  Such election shall not 
be terminable by the organization for that and the next year. 
    (d) The commissioner may for good cause extend the period 
within which a notice of election, or a notice of termination, 
must be filed and may permit an election to be retroactive but 
not any earlier than with respect to benefits paid after 
December 31, 1971. 
    (e) The commissioner, in accordance with such rules as the 
commissioner may prescribe, shall notify each nonprofit 
organization of any determination which the commissioner may 
make of its status as an employer and of the effective date of 
any election which it makes and of any termination of such 
election.  Such determinations shall be final unless reviewed in 
accordance with the provisions of section 268.12, subdivision 13.
      (2) Payments in lieu of contributions shall be made at the 
end of each calendar quarter, or at the end of any other period 
as determined by the commissioner and become due on the last day 
of the month next following the month in which the notice of 
benefits charged is mailed to the employer.  The commissioner 
shall bill each nonprofit organization (or group of such 
organizations) which has elected to make payments in lieu of 
contributions for an amount equal to the full amount of regular 
benefits plus one-half of the amount of extended benefits 
charged during such quarter or other prescribed period that is 
attributable to service in the employ of such organization. 
     (3) Past due payments of amounts in lieu of contributions 
shall be subject to the same interest charges and collection 
procedures that apply to past due contributions under sections 
268.16 and 268.161. 
     (4) If any nonprofit organization is delinquent in making 
payments in lieu of contributions as required under this 
subdivision, the commissioner may terminate such organization's 
election to make payments in lieu of contributions as of the 
beginning of the next taxable year, and such termination shall 
be effective for that and the following taxable year. 
    Sec. 6.  Minnesota Statutes 1988, section 268.07, 
subdivision 2, is amended to read: 
    Subd. 2.  [WEEKLY BENEFIT AMOUNT AND DURATION.] (a) To 
establish a benefit year for unemployment insurance benefits, 
effective after January 1, 1988, and thereafter, an individual 
must have: 
    (1) wage credits in two or more calendar quarters of the 
individual's base period; 
    (2) minimum total base period wage credits equal to the 
high quarter wages multiplied by 1.25; 
    (3) high quarter wage credits of not less than $1,000; and 
    (4) wage credits performed work in 15 or more calendar 
weeks in the base period.  
    (b) If the commissioner finds that an individual has 
sufficient wage credits and weeks worked within the base period 
to establish a valid claim, the weekly benefit amount payable to 
the individual during the individual's benefit year shall be 
equal to 1/26 of the individual's high quarter wage credits, 
rounded to the next lower whole dollar.  
    (c) Notwithstanding paragraph (b), the maximum weekly 
benefit amount of claims for benefits which establish a benefit 
year subsequent to July 1, 1979, shall be a percentage of the 
average weekly wage as determined under paragraphs (d) and (e).  
    (d) On or before June 30 of each year the commissioner 
shall determine the average weekly wage for purposes of 
paragraph (c) paid by employers subject to sections 268.03 to 
268.24 in the following manner:  
     (1) The sum of the total monthly employment reported for 
the previous calendar year shall be divided by 12 to determine 
the average monthly employment.  
     (2) The sum of the total wages reported for the previous 
calendar year shall be divided by the average monthly employment 
to determine the average annual wage.  
     (3) The average annual wage shall be divided by 52 to 
determine the average weekly wage.  
     (e) The maximum weekly benefit amount for any claim filed 
during the 12-month period subsequent to June 30 of any year 
shall be determined on the basis of the unemployment fund 
balance on December 31 of the preceding year.  If the fund 
balance is less than $70,000,000 on that date, the maximum 
weekly benefit amount shall be 66-2/3 percent of the average 
weekly wage; if the fund balance is more than $70,000,000 but 
less than $100,000,000, the maximum weekly benefit amount is 66 
percent of the average weekly wage; if the fund balance is more 
than $100,000,000 but less than $150,000,000, the maximum weekly 
benefit amount is 65 percent of the average weekly wage; if the 
fund balance is more than $150,000,000 but less than 
$200,000,000, the maximum weekly benefit amount is 64 percent of 
the average weekly wage; if the fund balance is more than 
$200,000,000 but less than $250,000,000, the maximum weekly 
benefit amount is 63 percent of the average weekly wage; if the 
fund balance is more than $250,000,000 but less than 
$300,000,000, the maximum weekly benefit amount is 62 percent of 
the average weekly wage; if the fund balance is more than 
$300,000,000 but less than $350,000,000, the maximum weekly 
benefit amount is 61 percent of the average weekly wage; if the 
fund balance is more than $350,000,000, the maximum weekly 
benefit amount is 60 percent.  The maximum weekly benefit amount 
as determined under this paragraph computed to the nearest whole 
dollar shall apply to claims for benefits which establish a 
benefit year which begins subsequent to June 30 of each year.  
     (f) Any eligible individual shall be entitled during any 
benefit year to a total amount of benefits equal to one-third of 
the individual's total base period wage credits rounded to the 
next lower dollar, not to exceed 26 times the individual's 
weekly benefit amount. 
     (g) Each eligible individual who is unemployed in any week 
shall be paid with respect to such week a benefit in an amount 
equal to the individual's weekly benefit amount less that part 
of the individual's earnings, including holiday pay, payable to 
the individual with respect to such week which is in excess of 
$200 for earnings from service in the national guard or a United 
States military reserve unit and the greater of $25 or 25 
percent of the earnings in other work; provided that no 
deduction may be made from the weekly benefit amount for 
earnings from service as a volunteer firefighter or volunteer 
ambulance service personnel.  Jury duty pay is not considered as 
earnings and shall not be deducted from benefits paid.  Such 
benefit, if not a whole dollar amount shall be rounded down to 
the next lower dollar amount. 
    Sec. 7.  Minnesota Statutes 1988, section 268.07, 
subdivision 3, is amended to read: 
    Subd. 3.  [WHEN WAGE CREDITS ARE NOT AVAILABLE.] (1) To 
establish a second benefit year following the expiration of an 
immediately preceding benefit year, an individual must have 
sufficient wage credits and weeks of employment to establish a 
claim under the provisions of subdivision 2 and must have 
performed services after the establishment of the expired 
benefit year.  The services performed must have been in insured 
work and the wage credits from the wages paid for those services 
must equal not less than ten times the weekly benefit amount of 
the second benefit year.  It is the purpose of this provision 
that an individual cannot establish more than one benefit year 
as a result of one separation from employment. 
    (2) No employer who provided 90 percent or more of the wage 
credits in a claimant's base period shall be charged for 
benefits based upon earnings of the claimant during a subsequent 
base period unless the employer has employed the claimant in any 
part of the subsequent base period. 
    (3) Wages paid by an employing unit may not be used for 
benefit purposes by any claimant who (a) individually, jointly, 
or in combination with the claimant's spouse, parent, or child 
owns or controls directly or indirectly 25 percent or more 
interest in the employing unit; or (b) is the spouse, parent, or 
minor child of any individual who owns or controls directly or 
indirectly 25 percent or more interest in the employing unit; 
and (c) is not permanently separated from employment. 
    This clause is effective when the individual has been paid 
four times the individual's weekly benefit amount in the current 
benefit year. 
    (4) Wages paid in seasonal employment, as defined in 
subdivision 2a, are not available for benefit purposes during 
weeks in which there is no seasonal employment available with 
the employer. 
    (5) No employer shall be charged for benefits if the 
employer is a base period employer on a second claim solely 
because of the transition from a base period consisting of the 
52-week period preceding the claim date to a base period as 
defined in section 268.04, subdivision 2. 
    Sec. 8.  Minnesota Statutes 1988, section 268.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DISQUALIFYING CONDITIONS.] An individual 
separated from any employment under paragraph (a), (b), or (d) 
shall be disqualified for waiting week credit and benefits.  For 
separations under paragraphs (a) and (b), the disqualification 
shall continue until four calendar weeks have elapsed following 
the individual's separation and the individual has earned eight 
times the individual's weekly benefit amount in insured work. 
    (a)  [VOLUNTARY LEAVE.] The individual voluntarily and 
without good cause attributable to the employer discontinued 
employment with such employer.  For the purpose of this 
paragraph, a separation from employment by reason of its 
temporary nature or for inability to pass a test or for 
inability to meet performance standards necessary for 
continuation of employment shall not be deemed voluntary.  
     A separation shall be for good cause attributable to the 
employer if it occurs as a consequence of sexual harassment.  
Sexual harassment means unwelcome sexual advances, requests for 
sexual favors, sexually motivated physical contact or other 
conduct or communication of a sexual nature when:  (1) the 
employee's submission to such conduct or communication is made a 
term or condition of the employment, (2) the employee's 
submission to or rejection of such conduct or communication is 
the basis for decisions affecting employment, or (3) such 
conduct or communication has the purpose or effect of 
substantially interfering with an individual's work performance 
or creating an intimidating, hostile, or offensive working 
environment and the employer knows or should know of the 
existence of the harassment and fails to take timely and 
appropriate action.  
     (b)  [DISCHARGE FOR MISCONDUCT.] The individual was 
discharged for misconduct, not amounting to gross misconduct 
connected with work or for misconduct which interferes with and 
adversely affects employment. 
     (c)  [EXCEPTIONS TO DISQUALIFICATION.] An individual shall 
not be disqualified under paragraphs (a) and (b) under any of 
the following conditions: 
     (1) the individual voluntarily discontinued employment to 
accept work offering substantially better conditions of work or 
substantially higher wages or both; 
     (2) the individual is separated from employment due to 
personal, serious illness provided that such individual has made 
reasonable efforts to retain employment. 
     An individual who is separated from employment due to the 
individual's illness of chemical dependency which has been 
professionally diagnosed or for which the individual has 
voluntarily submitted to treatment and who fails to make 
consistent efforts to maintain the treatment the individual 
knows or has been professionally advised is necessary to control 
that illness has not made reasonable efforts to retain 
employment. 
     (3) the individual accepts work from a base period employer 
which involves a change in location of work so that said work 
would not have been deemed to be suitable work under the 
provisions of subdivision 2 and within a period of 13 weeks from 
the commencement of said work voluntarily discontinues 
employment due to reasons which would have caused the work to be 
unsuitable under the provision of said subdivision 2; 
     (4) the individual left employment because of reaching 
mandatory retirement age and was 65 years of age or older; 
     (5) the individual is terminated by the employer because 
the individual gave notice of intention to terminate employment 
within 30 days.  This exception shall be effective only through 
the calendar week which includes the date of intended 
termination, provided that this exception shall not result in 
the payment of benefits for any week for which the individual 
receives the individual's normal wage or salary which is equal 
to or greater than the weekly benefit amount; 
     (6) the individual is separated from employment due to the 
completion of an apprenticeship program, or segment thereof, 
approved pursuant to chapter 178; 
     (7) the individual voluntarily leaves part-time employment 
with a base period employer while continuing full-time 
employment if the individual attempted to return to part-time 
employment after being separated from the full-time employment, 
and if substantially the same part-time employment with the base 
period employer was not available for the individual; 
    (8) the individual is separated from employment based 
solely on a provision in a collective bargaining agreement by 
which an individual has vested discretionary authority in 
another to act on behalf of the individual.; 
     (9) except as provided in paragraph (d), separations from 
part-time employment will not be disqualifying when the claim is 
based on sufficient full-time employment to establish a valid 
claim from which the claimant has been separated for 
nondisqualifying reasons. 
    (d)  [DISCHARGE FOR GROSS MISCONDUCT.] The individual was 
discharged for gross misconduct connected with work or gross 
misconduct which interferes with and adversely affects the 
individual's employment.  For a separation under this clause, 
the commissioner shall impose a total disqualification for the 
benefit year and cancel all of the wage credits from the last 
employer from whom the individual was discharged for gross 
misconduct connected with work. 
    For the purpose of this paragraph "gross misconduct" is 
defined as misconduct involving assault and battery or the 
malicious destruction of property or arson or sabotage or 
embezzlement or any other act, including theft, the commission 
of which amounts to a felony or gross misdemeanor.  For an 
employee of a health care facility, gross misconduct also 
includes misconduct involving an act of patient or resident 
abuse as defined in section 626.557, subdivision 2, clause (d).  
     If an individual is convicted of a felony or gross 
misdemeanor for the same act or acts of misconduct for which the 
individual was discharged, the misconduct is conclusively 
presumed to be gross misconduct if it was connected with the 
individual's work. 
     (e)  [LIMITED OR NO CHARGE OF BENEFITS.] Benefits paid 
subsequent to an individual's separation under any of the 
foregoing paragraphs, excepting paragraphs (c)(3), (c)(5), and 
(c)(8), shall not be used as a factor in determining the future 
contribution rate of the employer from whose employment such 
individual separated. 
     Benefits paid subsequent to an individual's failure, 
without good cause, to accept an offer of suitable reemployment 
shall not be used as a factor in determining the future 
contribution rate of the employer whose offer of reemployment 
was not accepted or whose offer of reemployment was refused 
solely due to the distance of the available work from the 
individual's residence, the individual's own serious illness, 
the individual's other employment at the time of the offer, or 
if the individual is in training with the approval of the 
commissioner. 
     (f)  [ACTS OF OMISSIONS.] An individual who was employed by 
an employer shall not be disqualified for benefits under this 
subdivision for any acts or omissions occurring after separation 
from employment with the employer.  
     (g)  [DISCIPLINARY SUSPENSIONS.] An individual shall be 
disqualified for waiting week credit and benefits for the 
duration of any disciplinary suspension of 30 days or less 
resulting from the individual's own misconduct.  Disciplinary 
suspensions of more than 30 days shall constitute a discharge 
from employment. 
    Sec. 9.  Minnesota Statutes 1988, section 268.10, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FILING.] (a) Claims for benefits shall be 
made in accordance with such rules as the commissioner may 
prescribe.  Each employer shall post and maintain printed 
statements of such rules in places readily accessible to 
individuals in the employer's service and shall make available 
to each such individual at the time of becoming unemployed, a 
printed statement of such rules.  Such printed statements shall 
be supplied by the commissioner to each employer without cost to 
the employer. 
     (b) Any employer upon separation of an employee from 
employment for any reason which may result in disqualification 
for benefits under section 268.09, shall furnish to such 
employee a separation notice which shall provide the employer's 
name, address, and employer account number as registered with 
the department, the employee's name and social security account 
number, the inclusive dates of employment, and the reason for 
the separation.  A copy of such separation notice shall be filed 
with the commissioner within seven days of such separation.  The 
commissioner shall require each individual filing a claim for 
benefits to establish a benefit year to furnish the reason for 
separation from all employers in the individual's base period. 
      (c) For the purpose of complying with section 268.04, 
subdivision 2, the commissioner may require all base period 
employers to provide such information as the commissioner may 
prescribe, including, but not limited to, wages paid during any 
part of the base period, whether or not such information was 
previously provided. 
     (d) Upon establishment of a benefit year, the commissioner 
shall give notice to the last employer for whom the individual 
worked and all base period employers.  The employer so notified 
shall have seven days after the mailing of the notice to file a 
protest to monetary entitlement or a protest raising an issue of 
ineligibility or disqualification. 
     (e) If, upon review of the wage information on file with 
the department, it is found that an employer failed to provide 
wage information for the claimant, the commissioner shall accept 
a claimant certification as to the wage credits earned, based 
upon the claimant's records, and issue a monetary determination 
of validity certification.  This determination may be modified 
based upon corrected information subsequently received from the 
employer or other sources.  The employer who failed to report 
the individual's wages or filed an erroneous report may be 
penalized in accordance with section 268.16 or 268.18.  In the 
absence of fraud, if a redetermination of validity of claim 
based on an employer's late corrected or erroneous report 
subsequently cancels or reduces the amount of benefits to which 
a claimant was entitled under the initial determination, the 
claimant shall not be required to make repayment to the fund of 
any benefits paid prior to such redetermination; and 
     (f) The commissioner shall determine any issue raised under 
paragraph (d) or by an employer's late report.  If an employer 
fails to file a separation notice within the time limits 
prescribed in paragraph (b), any relief from benefit charges 
provided by section 268.09, subdivision 1, clause (4) paragraph 
(e), shall apply to weeks of unemployment beginning after the 
filing of the late report or protest.  
    Sec. 10.  Minnesota Statutes 1988, section 268.10, 
subdivision 2, is amended to read: 
    Subd. 2.  [EXAMINATION OF CLAIMS; DETERMINATION; APPEAL.] 
(1) An official, designated by the commissioner, shall promptly 
examine each claim for benefits filed to establish a benefit 
year pursuant to this section, and, on the basis of the facts 
found, shall determine whether or not such claims are valid, and 
if valid, the weekly benefit amount payable, the maximum benefit 
amount payable during the benefit year, and the date the benefit 
year terminates, and this determination shall be known as the 
determination of validity.  Notice of the determination of 
validity or any redetermination as provided for in clause (4) 
shall be promptly given the claimant and all other interested 
parties.  If within the time specified for the filing of a 
protest as provided in subdivision 1, the employer makes an 
allegation of disqualification or raises an issue of the 
chargeability to the employer's account of benefits that may be 
paid on such claim, if the claim is valid, the issue thereby 
raised shall be promptly determined by said official and a 
notification of the determination delivered or mailed to the 
claimant and the employer.  If an initial determination or an 
appeal tribunal a referee's decision or the commissioner's 
decision awards benefits, the benefits shall be paid promptly 
regardless of the pendency of any appeal period or any appeal or 
other proceeding which may thereafter be taken.  Except as 
provided in clause (6), if an appeal tribunal a referee's 
decision modifies or reverses an initial determination awarding 
benefits, or if a commissioner's decision modifies or reverses 
an appeal decision awarding benefits, any benefits paid under 
the award of such initial determination or appeal tribunal 
referee's decision shall be deemed erroneous payments. 
    (2) At any time within 24 months from the date of the 
filing of a valid claim for benefits by an individual, an 
official of the department or any interested party or parties 
raises an issue of claimant's eligibility for benefits for any 
week or weeks in accordance with the requirements of the 
provisions of sections 268.03 to 268.24 or any official of the 
department or any interested party or parties or benefit year 
employer raises an issue of disqualification in accordance with 
the rules of the commissioner, a determination shall be made 
thereon and a written notice thereof shall be given to the 
claimant and such other interested party or parties or benefit 
year employer.  A determination issued under this clause which 
denies benefits for weeks for which the claimant has previously 
been paid benefits is an overpayment of those benefits subject 
to section 268.18.  
    (3) A determination issued pursuant to clauses (1) and (2) 
shall be final unless an appeal therefrom is filed by a claimant 
or employer within 15 days after the mailing of the notice of 
the determination to the last known address or personal delivery 
of the notice.  Every notice of determination shall contain a 
prominent statement indicating in clear language the method of 
appealing the determination, the time within which such an 
appeal must be made, and the consequences of not appealing the 
determination.  A timely appeal from a determination of validity 
in which the issue is whether an employing unit is an employer 
within the meaning of this chapter or whether services performed 
for an employer constitute employment within the meaning of this 
chapter shall be subject to the provisions of section 268.12, 
subdivision 13. 
     (4) At any time within 24 months from the date of the 
filing of a valid claim for benefits by an individual, the 
commissioner on the commissioner's own motion may reconsider a 
determination of validity made thereon and make a 
redetermination thereof on finding that an error in computation 
or identity or the crediting of wage credits has occurred in 
connection therewith or if the determination was made as a 
result of a nondisclosure or misrepresentation of a material 
fact.  A determination or redetermination issued under this 
clause which denies benefits for weeks for which the claimant 
has previously been paid benefits is an overpayment of those 
benefits subject to section 268.18.  
     (5) However, the commissioner may refer any disputed claims 
directly to a referee for hearing and determination in 
accordance with the procedure outlined in subdivision 3 and the 
effect and status of such determination in such a case shall be 
the same as though the matter had been determined upon an appeal 
to the tribunal from an initial determination. 
    (6) If a referee's decision affirms an initial 
determination awarding benefits or the commissioner affirms an 
appeal tribunal a referee's decision awarding benefits, the 
decision, if finally reversed, shall not result in a 
disqualification and benefits paid shall neither be deemed 
overpaid nor shall they be considered in determining any 
individual employer's future contribution rate under section 
268.06. 
    Sec. 11.  Minnesota Statutes 1988, section 268.12, 
subdivision 12, is amended to read: 
    Subd. 12.  [INFORMATION.] Except as hereinafter otherwise 
provided, data gathered from any employing unit, employer or 
individual pursuant to the administration of sections 268.03 to 
268.24, and from any determination as to the benefit rights of 
any individual are private data on individuals or nonpublic data 
as defined in section 13.02, subdivisions 9 and 12 and may not 
be disclosed except pursuant to this subdivision or a valid 
court order.  These data may be disseminated to and used by the 
following agencies without the consent of the subject of the 
data:  
     (a) State and federal agencies specifically authorized 
access to the data by state or federal law; 
     (b) Any agency of this or any other state; or any federal 
agency charged with the administration of an employment security 
law or the maintenance of a system of public employment offices; 
     (c) Local human rights groups within the state which have 
enforcement powers; 
      (d) The Minnesota department of revenue on an 
interchangeable basis with the department of jobs and training 
subject to the following restrictions and notwithstanding any 
law to the contrary:  
     (1) The department of revenue may have access to department 
of jobs and training data on individuals and employing units 
only to the extent necessary for proper enforcement of tax laws; 
and 
    (2) The department of jobs and training may shall have 
access to department of revenue individual income tax return 
data pertaining only to individuals who have claimed benefits 
under sections 268.03 to 268.24 and only if the individuals are 
the subject of investigations based on other information 
available to the department of jobs and training.  The data 
provided by the department of revenue shall be limited to the 
amount of gross income earned by an individual, the total amount 
of earnings from each employer and the employers' names to the 
identity, whereabouts, employment, income, and property of an 
individual who:  owes or allegedly owes an obligation to the 
department of jobs and training; is subject to a benefit 
overpayment or fraud investigation; or is subject to an 
investigation, for possible criminal prosecution under this 
chapter.  Upon receipt of the data, the department of jobs and 
training may not disseminate the data to any other individual or 
agency except in connection with a prosecution for violation of 
the provisions of sections 268.03 to 268.24.  This clause shall 
not be construed to be a restriction on the exchange of 
Information pertaining to corporations or other employing 
units shall be disclosed to the extent necessary for the proper 
enforcement of this chapter; 
    (e) Public and private agencies responsible for 
administering publicly financed assistance programs for the 
purpose of monitoring the eligibility of the program's 
recipients; 
    (f) The department of labor and industry for the purpose of 
determining the eligibility of the data subject on an 
interchangeable basis with the department of jobs and training 
subject to the following limitations and notwithstanding any law 
to the contrary: 
    (1) the department of jobs and training shall have access 
to nonpublic data on employers, individuals, and employing units 
for uses consistent with the administration of its duties under 
sections 268.03 to 268.24; and 
    (2) the department of labor and industry shall have access 
to nonpublic data on employers, individuals, and employing units 
for uses consistent with the administration of its duties under 
state law; 
    (g) The department of trade and economic development may 
have access to nonpublic data as defined in section 13.02, 
subdivision 9, for its internal use only; when received by the 
department of trade and economic development, the data remain 
nonpublic data; 
    (h) Local and state welfare agencies for monitoring the 
eligibility of the data subject for assistance programs, or for 
any employment or training program administered by those 
agencies, whether alone, in combination with another welfare 
agency, or in conjunction with the department of jobs and 
training; and 
    (i) Local, state and federal law enforcement agencies for 
the sole purpose of ascertaining the last known address and 
employment location of the data subject, provided the data 
subject is the subject of a criminal investigation.  
    Data on individuals, employers, and employing units which 
are collected, maintained, or used by the department in an 
investigation pursuant to section 268.18, subdivision 3, are 
confidential as to data on individuals and protected nonpublic 
data as defined in section 13.02, subdivisions 3 and 13, as to 
nonindividual employers and employing units, and shall not be 
disclosed except pursuant to statute or valid court order or to 
a party named in a criminal proceeding, administrative or 
judicial, for preparation of a defense.  
    Data on individuals, employers, and employing units which 
are collected, maintained, or used by the department in the 
adjudication of a separation or eligibility issue pursuant to 
the administration of section 268.10, subdivision 2, are 
confidential private as to data on individuals and protected 
nonpublic data as to nonindividual employers and employing units 
as defined in section 13.02, subdivisions 3 and 13, and shall 
not be disclosed except pursuant to the administration of 
section 268.10, subdivisions 3 to 8, or pursuant to a valid 
court order. 
    Aggregate data about employers compiled from individual job 
orders placed with the department of jobs and training are 
nonpublic data as defined in section 13.02, subdivision 9, if 
the commissioner determines that divulging the data would result 
in disclosure of the identity of the employer.  The general 
aptitude test battery and the nonverbal aptitude test battery as 
administered by the department are also classified as nonpublic 
data.  
     Data on individuals collected, maintained or created 
because an individual applies for benefits or services provided 
by the energy assistance and weatherization programs 
administered by the department of jobs and training is private 
data on individuals and shall not be disseminated except 
pursuant to section 13.05, subdivisions 3 and 4.  
     Data gathered by the department pursuant to the 
administration of sections 268.03 to 268.24 shall not be made 
the subject or the basis for any suit in any civil proceedings, 
administrative or judicial, unless the action is initiated by 
the department. 
    Sec. 12.  Minnesota Statutes 1988, section 268.16, 
subdivision 4, is amended to read: 
    Subd. 4.  [COMPROMISE AGREEMENTS.] The commissioner, or any 
officer or employee of the state department of jobs and training 
authorized in writing by the commissioner, is authorized to 
enter into an agreement in writing with any employer relating to 
the liability of such employer in respect to delinquent 
contributions, reimbursements, interest, penalties, and costs; 
provided that such agreement shall not be made in respect to 
liability for the principal sum of delinquent contributions or 
reimbursements unless the same has been delinquent for a period 
of at least four years prior to the making of such agreement.  
The commissioner may also enter into an agreement, with respect 
to liability for delinquent contributions, interest, penalties 
and costs, with any employer who has never paid any 
contributions to the fund and such failure to pay contributions 
was, in the opinion of the commissioner, due to an honest belief 
on the part of such employer that the employer was not covered 
by sections 268.03 to 268.24.  Any agreements made under this 
subdivision shall be subject to the approval of the attorney 
general and a summary of any such agreements shall be published 
in the next succeeding annual report of the commissioner to the 
governor. 
    If such agreements are approved by the commissioner and the 
attorney general, the same shall be final and conclusive; and, 
except upon a showing of fraud or malfeasance or 
misrepresentation of a material fact, the case shall not be 
reopened as to the matters agreed upon or the agreement modified 
by any officer, employee or agent of the state; and, in any 
suit, action or proceeding, such agreement, or any 
determination, assessment, collection, payment, abatement, 
refund, or credit made in accordance therewith, shall not be 
annulled, modified, set aside or destroyed. 
    Sec. 13.  Minnesota Statutes 1988, section 268.162, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ACQUISITION OF ORGANIZATION, TRADE, OR 
BUSINESS.] Any individual or organization, whether or not an 
employing unit, which acquires all or part of the organization, 
trade, or business or all or part of the assets thereof from an 
employer, is jointly and severally liable, in an amount not to 
exceed the reasonable value of that part of the organization, 
trade, or business or assets acquired, for the contributions due 
and unpaid by the employer, and the amount of liability shall, 
in addition, be a lien against the property or assets so 
acquired which shall be prior to all other unrecorded 
liens.  This subdivision does not apply to sales in the normal 
course of the employer's business. 
    Sec. 14.  Minnesota Statutes 1988, section 268.163, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CONTRACTORS.] A contractor, who is or 
becomes an employer under this chapter, who contracts with any 
subcontractor, who is or becomes an employer under this chapter, 
is directly liable for shall guarantee the payment of all the 
contributions, interest, penalties, and collection costs which 
are due or become due from the subcontractor with respect to 
wages paid for employment on the contract, unless the contractor 
requires by: 
    (a) withholding sufficient money on the contract; or 
    (b) requiring the subcontractor to provide a good and 
sufficient bond guaranteeing the payment of all contributions, 
interest, penalties, and collection costs which may become due.  
     The contractor may make a written request for verification 
that the subcontractor has paid the contributions due 60 days 
after the due date for filing the contribution report that 
includes the final wages paid for services performed under the 
contract.  If department records show that the subcontractor has 
paid the contributions for the period covered by the contract, 
the department may release the contractor from its liability 
under this subdivision. 
    The words "contractor" and "subcontractor" include 
individuals, partnerships, firms, or corporations, or other 
association of persons engaged in the construction industry. 
    Sec. 15.  Minnesota Statutes 1988, section 268.165, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WITHHOLDING OF UNEMPLOYMENT BENEFITS.] 
Notwithstanding section 268.17, the commissioner may deduct and 
withhold up to 50 percent of each unemployment compensation 
payment payable to an individual under this chapter for unpaid 
contributions, interest, penalties, and costs which the 
individual has been determined liable to pay. 
    This subdivision is effective to the extent permitted by 
federal law.  
    Sec. 16.  Minnesota Statutes 1988, section 268.165, 
subdivision 2, is amended to read: 
    Subd. 2.  [EFFECT OF PAYMENTS.] Any amounts deducted and 
withheld under this section shall be treated as if paid to the 
individual as benefits and paid by the individual to the 
department in satisfaction of the individual's delinquent 
contributions, interest, penalties, and costs. 
    Sec. 17.  [EFFECTIVE DATE.] 
    This act is effective the day following final enactment. 
    Presented to the governor May 2, 1989 
    Signed by the governor May 3, 1989, 3:09 p.m.