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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
bank deposits; technical correction
(NOW: unemployment insurance; employer; limitations)
Purpose
Asserts, for the purpose of unemployment insurance, that an employer is no longer considered a base-period employer after three years from the date the employee separates from employment.
Background
The federally-established Unemployment Insurance Benefit Program, administered by the Department of Economic Security (DES), according to state law, provides unemployment benefits to persons unemployed through no fault of their own. Statute prescribes eligibility requirements relating to the reason for separation from employment, wages earned prior to unemployment and the individual's availability and work search activities (A.R.S. Title 23, Chapter 4).
Monetary eligibility for unemployment insurance benefits is based on covered wages paid to an employee during a one-year period known as the base period. A base period is the first four of the last five completed calendar quarters immediately preceding the first day an individual applies for unemployment insurance (A.R.S. § 23-605). Benefit payments are paid from Arizona's Unemployment Insurance Trust Fund (UITF), which is financed by a tax that employers pay on the first $8,000 of wages paid to each employee in a calendar year. DES utilizes a reserve ratio system to determine the tax rates for employers. New employers are assigned a tax rate of two percent for a minimum of two calendar years. Afterwards, the eligible rate may be higher or lower depending on: 1) the amount of taxes paid; 2) the amount of unemployment benefits paid to former employees and changed to the employer; and 3) the average size of the employer's taxable payroll (A.R.S. §§ 23-728; 23-729; and 23-730).
Base-period employers are the employers by whom an individual was paid base-period wages (A.R.S. § 23-606).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Asserts, for the purpose of unemployment insurance, that an employer is no longer considered a base-period employer after three years from the date the employee separates from employment.
2. Becomes effective on the general effective date.
House Action
COM 2/14/23 DPA/SE 10-0-0-0
3rd Read 2/27/23 59-0-1
Prepared by Senate Research
March 13, 2023
JT/sr