OLR Bill Analysis

sHB 5234

AN ACT CONCERNING THE WILFUL FAILURE OF AN EMPLOYER TO DECLARE THE PAYMENT OF WAGES ON PAYROLL RECORDS FOR UNEMPLOYMENT COMPENSATION PURPOSES.

SUMMARY:

This bill increases the penalty on employers who wilfully fail to declare payment of wages in order to avoid paying unemployment taxes or benefits. The bill permits a penalty of 15%, rather than the 10% under current law, of the total contributions due to the Labor Department under state unemployment law.

Under current law, the penalty applies only to the past due contributions. The bill specifies the penalty relates to the contributions due during the entire period the employer willfully failed to declare the wages. It is unclear if the penalty is based on only the unpaid contributions or on all contributions due (paid and unpaid) during the nonpayment period.

EFFECTIVE DATE: July 1, 2013

BACKGROUND

Legislative History

The Labor and Public Employees Committee referred the bill to the Judiciary Committee, which favorably reported out substitute language. The substitute deleted sections that would have made knowingly (1) employing a person without declaring his or her pay or (2) making a false statement in order to avoid payment under unemployment law, which are misdemeanors, class D felonies.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Change of Reference

Yea

6

Nay

5

(03/15/2012)

Judiciary Committee

Joint Favorable Substitute

Yea

44

Nay

0

(04/02/2012)