HF 74 (LSB 1953YH (1) 87)

HOUSE FILE 74

BY  HUNTER

A BILL FOR

An Act increasing certain penalties for employers willfully misclassifying employees for unemployment compensation contribution purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 96.14, subsection 2, paragraph e, Code 2017, is amended to read as follows:
   e.  (1)  If the department finds that any employer has willfully failed to pay any contribution or part thereof when required by this chapter and the rules of the department, with intent to defraud the department, then such employer shall in addition to such contribution or part thereof, pay a contribution equal to fifty percent of the amount of such contribution or part thereof, as the case may be.
   (2)  If the department finds that such a failure to pay by an employer involves the misclassification of an employee’s wages on a federal 1099 record, for any subsequent finding by the department of such a failure to pay by that employer involving the misclassification of an employee’s wages on a federal 1099 record, the additional contribution required by subparagraph (1) shall instead equal one hundred percent of the amount the employer failed to pay due to misclassification.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that if the department of workforce development finds that an employer willfully failed to pay any contribution for state unemployment compensation with intent to defraud the department, and that the failure to pay by the employer involved the misclassification of an employee’s wages on a federal 1099 record, for any subsequent finding by the department of such a failure to pay by that employer involving the misclassification of an employee’s wages on a federal 1099 record, the additional contribution penalty required by Code section 96.14(2)(e) shall equal 100 percent of the amount the employer failed to pay due to misclassification. Current law provides that such an additional contribution penalty equals 50 percent of the amount the employer failed to pay.