HB4733sam002 98TH GENERAL ASSEMBLY

Sen. John J. Cullerton

Filed: 5/30/2014

09800HB4733sam002 LRB098 16645 JLS 60495 a

AMENDMENT TO HOUSE BILL 4733

AMENDMENT NO. ______. Amend House Bill 4733 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Illinois State Training and Employment Program (I-STEP) Act.

Section 5. Definitions. In this Act:

"Agreement" means a written agreement between the Department of Commerce and Economic Opportunity or the Department of Employment Security and an employer or a business association, labor organization, local workforce investment board, community college, or nonprofit corporation concerning a project and any amendments to that agreement.

"Base employment" means the highest number of workers employed by the employer in the last 4 completed quarters preceding the effective date of the agreement establishing the project. The Department of Employment Security shall verify an employer's base employment through means including, but not limited to, wage reports submitted pursuant to the Unemployment Insurance Act.

"Business association" means an organization formed under Section 501(c)(6) of the Internal Revenue Code or a generally recognized entity or organization that represents the interests of multiple businesses in Illinois.

"Community college" means a community college as defined in Section 1-2 of the Public Community College Act.

"Credit" or "I-STEP Credit" means an amount agreed to in an agreement with an employer under this Act that does not exceed the Incremental Income Tax attributable to the employer's project.

"Employer" means a for-profit, legal entity, including, but not limited to, a sole proprietorship, partnership, corporation, joint venture, association, or cooperative, that has in its employ one or more individuals performing services for it.

"Federal minimum wage" means the minimum wage as defined by the federal Fair Labor Standards Act (29 U.S.C. 201 et seq.).

"Full-time, permanent job" means a job in which the employee works for the employer at a rate of at least 35 hours per week.

"I-STEP Fund" means the fund established in Section 20 of this Act.

"Incremental income tax" means the total amount withheld during the taxable year under Article 7 of the Illinois Income Tax Act from the compensation paid to employees in new jobs that are the subject of an agreement.

"Labor organization" means an organization defined as a "labor organization" under the National Labor Relations Act.

"New job" means a full-time, permanent job located in this State that meets all of the following:

(1) The job results in a net increase in the base employment in this State for the employer.

(2) The job is not being filled or refilled as a result of a layoff or to replace an employee who is or has been on strike or locked out by the employer.

(3) The job is not a job that existed in the employer's business within this State within the last 4 completed quarters preceding the effective date of the agreement.

(4) The wage paid for the job is equal to or exceeds 175% of the federal minimum wage on the effective date of the agreement.

(5) The employer has posted the job on the IllinoisJobLink.com System or its successor system for at least 2 weeks preceding the effective date of the agreement and did not locate an individual who has the requisite expertise, experience, and background, except that this requirement does not apply if either (i) the job would be covered by a collective bargaining agreement between the employer and a labor organization that includes provisions concerning hiring or training or (ii) the employer does not have employees performing services in this State as of the effective date of the agreement.

A new job may not be filled by a child, grandchild, parent, or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital, or value of the employer.

"Program costs" means all necessary and incidental costs of providing program services in connection with a project, including administrative costs.

"Program services" includes, but is not limited to, any of the following items needed to hire or train a worker for a new job:

(1) Training or retraining including, but not limited to, training or retraining provided by apprenticeship and training programs approved by and registered with the United States Department of Labor's Bureau of Apprenticeship and Training.

(2) Adult basic education and job-related instruction.

(3) Developmental, readiness, and remedial education.

(4) Vocational and skill-assessment services and testing.

(5) Training facilities, equipment, materials, and supplies.

"Project" means an arrangement for program services that are the subject of an agreement entered into under this Act.

Section 10. Agreement.

(a) The Director of Commerce and Economic Opportunity and the Director of Employment Security shall each have the power to enter into an agreement to establish a project with an employer. The agreement may be directly with an employer or with a business association, labor organization, local workforce investment board, community college, or nonprofit corporation acting on behalf of an employer. The Directors of Commerce and Economic Opportunity and Employment Security may consult with the I-STEP Panel before entering into an agreement.

(b) An agreement shall, at a minimum:

(1) State the project's total program costs.

(2) State that the employer may use the I-STEP Credit pursuant to Section 15 to reimburse up to 75% of the project's total program costs. If the Department of Employment Security or the Department of Commerce and Economic Opportunity determines that the project will reduce long-term unemployment in the State, the agreement shall state that the employer may use the I-STEP Credit to reimburse up to 100% of the project's total program costs.

(3) Describe the program services to be provided.

(4) Specify the number of new jobs covered by the project.

(5) Include a certification by the employer that it shall (i) offer to assume the collective bargaining obligations of a prior employer, including any existing collective bargaining agreement with the bargaining representative of any existing collective bargaining unit or units performing substantially similar work to the work being performed by any employee in a new job and (ii) offer employment to all employees currently employed in any existing bargaining unit performing substantially similar work to the work being performed by any employee in a new job.

(6) Include a provision that fixes the maximum amount of I-STEP Credit for the reimbursement of program costs for each taxable year.

(7) Specify the duration of the I-STEP Credit and the first taxable year for which the Credit may be claimed.

(8) Require that an employer shall at all times keep proper books of record and account, in accordance with generally accepted accounting principles consistently applied, with the books, records, or papers related to the agreement in the custody or control of the employer open for reasonable inspection and audits by the Department of Commerce and Economic Opportunity and Department of Employment Security and including, without limitation, the making of copies of the books, records, or papers and the inspection or appraisal of any of the employer or project assets related to the project.

(9) Indicate the amount of administrative costs that the employer will be required to deposit into the I-STEP Fund.

(10) Contain other provisions the Department of Commerce and Economic Opportunity and Department of Employment Security consider appropriate or necessary.

(c) The administrative costs of the Department of Commerce and Economic Opportunity with respect to each project shall not exceed 5% of the program costs. The Department of Employment Security's administrative costs with respect to each project shall not exceed 5% of the program costs. In the case of an agreement between the Department of Commerce and Economic Opportunity or the Department of Employment Security and a business association, labor organization, local workforce investment board, community college, or nonprofit corporation acting on behalf of an employer, the administrative costs of the business association, labor organization, local workforce investment board, community college, or nonprofit corporation shall not exceed 5% of the program costs and shall be in addition to the program costs of the Department of Commerce and Economic Opportunity and the Department of Employment Security.

(d) The Department of Commerce and Economic Opportunity and the Department of Employment Security shall annually report to the General Assembly, no later than December 31, on the new jobs created and amount of credits for which employers have been certified as eligible pursuant to this Act.

(e) A summary of each agreement shall be posted on the website maintained pursuant to the Corporate Accountability for Tax Expenditures Act.

Section 15. I-STEP Credit.

(a) Subject to the conditions set forth in this Act, for any taxable year ending on or after December 31, 2014, an employer is entitled to a credit against its obligation to pay over withholding under Section 704A of the Illinois Income Tax Act, if the employer is awarded a Credit under this Act for that taxable year.

(b) The duration of the credit may not exceed 10 taxable years. The credit may be stated as a percentage of the incremental income tax attributable to the employer's project and shall include a fixed dollar limitation that shall not exceed the amount calculated pursuant to paragraph (2) of subsection (b) of Section 10.

(c) An employer claiming a credit under this Act shall submit to the Department of Revenue a copy of the certificate of verification under this Act for the taxable year. However, failure to submit a copy of the certificate with the employer's tax return shall not invalidate a claim for a credit.

(d) For an employer to be eligible for a certificate of verification, the employer shall provide proof as required by the Department of Commerce and Economic Opportunity or the Department of Employment Security prior to the end of each calendar year including, but not limited to, attestation by the employer:

(1) regarding the number of new jobs specified in its agreement and into which it has hired employees;

(2) that employees received the program services specified in the agreement; and

(3) regarding the amount of program costs incurred by the employer with respect to those new jobs.

(e) For a certificate of verification to be valid, it shall be signed by the Director of Commerce and Economic Opportunity or the Director of Employment Security.

Section 20. I-STEP Fund.

(a) There is established in the State treasury a special fund to be known as the I-STEP Fund.

(b) Money received, earned, or collected pursuant to this Act shall be credited to the I-STEP Fund. All interest earnings on amounts within the I-STEP Fund shall accrue to the I-STEP Fund. The I-STEP Fund may include such funds and accounts as are necessary for the implementation and administration of this Act. All sums recovered for losses sustained by the I-STEP Fund shall be deposited into the I-STEP Fund.

(c) Moneys may be paid or expended from the I-STEP Fund for the payment of administrative costs associated with projects established pursuant to this Act.

(d) Any payments or expenditures from the I-STEP Fund, other than administrative costs associated with projects established pursuant to this Act, shall require the approval of both the Director of Employment Security and the Director of Commerce and Economic Opportunity.

Section 25. I-STEP Panel.

(a) There is created the I-STEP Panel. The I-STEP Panel shall consist of the Director of Commerce and Economic Opportunity and the Director of Employment Security, who shall serve as co-chairpersons, and 11 members who shall be appointed by the Governor with the advice and consent of the Senate.

(b) The members of the I-STEP Panel shall include a representative from each of the following businesses and groups: manufacturing, small business, a local or State business association or chamber of commerce, building and construction trades unions, a labor organization representing workers engaged in manufacturing, a labor organization representing workers engaged in service professions, a not-for-profit corporation providing workforce training, a community college, and a local workforce investment board. There shall be 2 at-large voting members who reside within counties or municipalities that have had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate as reported by Department of Employment Security for the 5 years preceding the date of appointment. All appointments shall be made in a geographically diverse manner.

(c) For the initial appointments to the I-STEP Panel, 5 members shall be appointed to serve a 2-year term and 6 members shall be appointed to serve a 4-year term. Thereafter, all appointments shall be for terms of 4 years. The initial term of appointed members shall commence on January 1, 2015. Thereafter, the terms of appointed members shall commence on January 1, except in the case of an appointment to fill a vacancy. Vacancies occurring among the members shall be filled in the same manner as the original appointment for the remainder of the unexpired term. For a vacancy occurring when the Senate is not in session, the Governor may make a temporary appointment until the next meeting of the Senate when a person shall be nominated to fill the office, and, upon confirmation by the Senate, he or she shall hold office during the remainder of the term. A vacancy in membership does not impair the ability of a quorum to exercise all rights and perform all duties of the I-STEP Panel. A member is eligible for reappointment.

(d) The I-STEP Panel shall advise the Department of Commerce and Economic Opportunity and Department of Employment Security on the implementation and administration of this Act.

(e) Members of the I-STEP Panel shall serve without compensation, but shall be reimbursed for any necessary expenses from funds appropriated for that purpose.

Section 30. Powers of the Departments. In addition to those powers granted under the Civil Administrative Code of Illinois, the Department of Commerce and Economic Opportunity and the Department of Employment Security are granted and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act. These powers shall include, but are not limited to, power and authority to:

(1) Jointly promulgate procedures or rules necessary and appropriate for the administration of this Act, establish forms for applications, notifications, contracts, or any other agreements, and accept applications at any time during the year.

(2) Establish, negotiate, and effectuate any term, agreement, or other document with any person necessary or appropriate to accomplish the purposes of this Act, and to consent, subject to the provisions of any agreement with another party, to the modification or restructuring of any agreement made pursuant to this Act to which the Department of Commerce and Economic Opportunity or the Department of Employment Security is a party.

(3) Fix, determine, charge, and collect any premiums, fees, charges, costs, and expenses from employers, including, without limitation, application fees, commitment fees, program fees, financing charges, or publication fees, deemed appropriate to pay expenses necessary or incident to the (i) administration, staffing, or operation in connection with the Department of Commerce and Economic Opportunity's or the Department of Employment Security's activities under this Act, (ii) preparation, implementation, and enforcement of the terms of the agreement, or (iii) consultation, advisory and legal fees and other costs; however, all fees and expenses incident thereto shall be the responsibility of the employer.

(4) Provide for sufficient personnel to permit administration, staffing, operation, and related support required to adequately discharge its duties and responsibilities described in this Act from funds made available for that purpose.

(5) Gather information and conduct inquiries, in the manner and by methods as deemed desirable including, without limitation, gathering information with respect to employers for the purpose of making any designations or certifications necessary or desirable or to gather information to assist the I-STEP Panel with any recommendation or guidance in the furtherance of the purposes of this Act.

Section 80. The Public Employment Office Act is amended by changing Section 7 as follows:

(20 ILCS 1015/7) (from Ch. 48, par. 183)

Sec. 7. No fee or compensation shall be charged or received directly or indirectly from persons applying for employment or help through said free employment offices, and any officer or employee of the Department of Employment Security who shall accept, directly or indirectly any fee or compensation from any applicant or from his or her representative shall be guilty of a Class C misdemeanor, except that this Section does not prohibit referral of an individual to an apprenticeship program that is approved by and registered with the United States Department of Labor, Bureau of Apprenticeship and Training and charges an application fee of $50 or less.

(Source: P.A. 83-1503.)

Section 85. The State Finance Act is amended by adding Section 5.855 as follows:

(30 ILCS 105/5.855 new)

Sec. 5.855. The I-STEP Fund.

Section 90. The Unemployment Insurance Act is amended by changing Sections 206.1, 225, 245, 500, 611, 702, 1402, 1500, 1506.1, 2101, 2201, 2201.1, and 2401 and by adding Sections 502 and 1402.1 as follows:

(820 ILCS 405/206.1)

Sec. 206.1. Employment; employee leasing company.

A. For purposes of this Section:

1. "Client" means an individual or entity which has contracted with an employee leasing company to supply it with or assume responsibility for personnel management of one or more workers to perform services on an on-going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing Company Act.

2. "Employee leasing company" means an individual or entity which contracts with a client to supply or assume responsibility for personnel management of one or more workers to perform services for the client on an on-going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing Company Act.

B. Subject to subsection C, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the employee leasing company and are not services in "employment" of the client if all of the following conditions are met:

1. The employee leasing company pays the individual for the services directly from its own accounts; and

2. The employee leasing company, exclusively or in conjunction with the client, retains the right to direct and control the individual in the performance of the services; and

3. The employee leasing company, exclusively or in conjunction with the client, retains the right to hire and terminate the individual; and

4. The employee leasing company reports each client in the manner the Director prescribes by regulation; and .

5. The employee leasing company has provided, and there remains in effect, such irrevocable indemnification, as the Director may require by rule, to create a primary obligation on the part of the provider to the Illinois Department of Employment Security for obligations of the employee leasing company accrued and final under this Act. The rule may prescribe the form the indemnification shall take including, but not limited to, a surety bond or an irrevocable standby letter of credit. The obligation required pursuant to the rule shall not exceed $1,000,000.

C. Notwithstanding subsection B, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the client and are not services in "employment" of the employee leasing company if:

1. The contribution rate, or, where applicable, the amended contribution rate, of the client is greater than the sum of the fund building rate established for the year pursuant to Section 1506.3 of this Act plus the greater of 2.7% or 2.7% times the adjusted state experience factor for the year; and

2. The contribution rate, or, where applicable, the amended contribution rate, of the employee leasing company is less than the contribution rate, or, where applicable, the amended contribution rate of the client by more than 1.5% absolute.

D. Except as provided in this Section and notwithstanding any other provision of this Act to the contrary, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the client and are not services in "employment" of the employee leasing company.

E. Nothing in this Section shall be construed or used to effect the existence of an employment relationship other than for purposes of this Act.

(Source: P.A. 91-890, eff. 7-6-00.)

(820 ILCS 405/225) (from Ch. 48, par. 335)

Sec. 225. This Section, and not Section 212 of this Act, controls the determination of employment status for services performed by individuals in the delivery or distribution of newspapers or shopping news.

(A) The term "employment" shall not include services performed by an individual under the age of eighteen in the delivery or distribution of newspapers or shopping news.

(B) The term "employment" does not include the performance of freelance editorial or photographic work for a newspaper.

(B-5) The employment status of individuals engaged in the delivery of newspapers or shopping news shall be determined as provided in this subsection. The term "employment" does not include the delivery or distribution of newspapers or shopping news if at least one of the following 4 elements is present:

(1) The individual performing the services gains the profits and bears the losses of the services.

(2) The person or firm for whom the services are performed does not represent the individual as an employee to its customers.

(3) The individual hires his or her own helpers or employees, without the need for approval from the person or firm for whom the services are performed, and pays them without reimbursement from that person or firm.

(4) Once the individual leaves the premises of the person or firm for whom the services are performed or the printing plant, the individual operates free from the direction and control of the person or firm, except as is necessary for the person or firm to ensure quality control of the newspapers or shopping news, including, but not limited to, the condition of the newspapers or shopping news upon delivery and the location and timing of delivery of the newspapers or shopping news.

(C) Notwithstanding subsection (B-5), the The term "employment" does not include the delivery or distribution of newspapers or shopping news to the ultimate consumer if:

(1) substantially all of the remuneration for the performance of the services is directly related to sales, "per piece" fees, or other output, rather than to the number of hours worked; and

(2) the services are performed under a written contract between the individual and the person or firm for whom the services are performed, and the contract provides that the individual will not be treated as an employee for federal tax purposes.

(3) Delivery or distribution to the ultimate consumer does not include:

(i) delivery or distribution for sale or resale, including, but not limited to, distribution to a newsrack or newsbox, salesperson, newsstand or retail establishment;

(ii) distribution for further distribution, regardless of subsequent sale or resale.

(D) Subsections (B-5) and Subsection (C) shall not apply in the case of any individual who provides delivery or distribution services for a newspaper pursuant to the terms of a collective bargaining agreement and shall not be construed to alter or amend the application or interpretation of any existing collective bargaining agreement. Further, subsections (B-5) and subsection (C) shall not be construed as evidence of the existence or non-existence of an employment relationship under any other Sections of this Act or other existing laws.

(E) Subsections (B), (B-5), and (C) shall not apply to services that are required to be covered as a condition of approval of this Act by the United States Secretary of Labor under Section 3304 (a)(6)(A) of the Federal Unemployment Tax Act.

(Source: P.A. 87-1178.)

(820 ILCS 405/245) (from Ch. 48, par. 370)

Sec. 245. Coordination with Federal Unemployment Tax Act. Notwithstanding any provisions of this Act to the contrary, excepting the exemptions from the definition of employment contained in Sections 212.1, 217.1, 217.2, 226, and 231 and subsections (B), (B-5), and (C) B and C of Section 225:

A. The term "employer" includes any employing unit which is an "employer" under the provisions of the Federal Unemployment Tax Act, or which is required, pursuant to such Act, to be an "employer" under this Act as a condition for the Federal approval of this Act requisite to the full tax credit, against the tax imposed by the Federal Act, for contributions paid by employers pursuant to this Act.

B. The term "employment" includes any services performed within the State which constitute "employment" under the provisions of the Federal Unemployment Tax Act, or which are required, pursuant to such Act, to be "employment" under this Act as a condition for the Federal approval of this Act requisite to the full tax credit, against the tax imposed by the Federal Act, for contributions paid by employers pursuant to this Act.

C. The term "wages" includes any remuneration for services performed within this State which is subject to the payment of taxes under the provisions of the Federal Unemployment Tax Act.

(Source: P.A. 89-252, eff. 8-8-95; 89-649, eff. 8-9-96.)

(820 ILCS 405/500) (from Ch. 48, par. 420)

Sec. 500. Eligibility for benefits. An unemployed individual shall be eligible to receive benefits with respect to any week only if the Director finds that:

A. He has registered for work at and thereafter has continued to report at an employment office in accordance with such regulations as the Director may prescribe, except that the Director may, by regulation, waive or alter either or both of the requirements of this subsection as to individuals attached to regular jobs, and as to such other types of cases or situations with respect to which he finds that compliance with such requirements would be oppressive or inconsistent with the purposes of this Act, provided that no such regulation shall conflict with Section 400 of this Act.

B. He has made a claim for benefits with respect to such week in accordance with such regulations as the Director may prescribe.

C. He is able to work, and is available for work; provided that during the period in question he was actively seeking work and he has certified such. Whenever requested to do so by the Director, the individual shall, in the manner the Director prescribes by regulation, inform the Department of the places at which he has sought work during the period in question. Nothing in this subsection shall limit the Director's approval of alternate methods of demonstrating an active search for work based on regular reporting to a trade union office.

1. If an otherwise eligible individual is unable to work or is unavailable for work on any normal workday of the week, he shall be eligible to receive benefits with respect to such week reduced by one-fifth of his weekly benefit amount for each day of such inability to work or unavailability for work. For the purposes of this paragraph, an individual who reports on a day subsequent to his designated report day shall be deemed unavailable for work on his report day if his failure to report on that day is without good cause, and on each intervening day, if any, on which his failure to report is without good cause. As used in the preceding sentence, "report day" means the day which has been designated for the individual to report to file his claim for benefits with respect to any week. This paragraph shall not be construed so as to effect any change in the status of part-time workers as defined in Section 407.

2. An individual shall be considered to be unavailable for work on days listed as whole holidays in "An Act to revise the law in relation to promissory notes, bonds, due bills and other instruments in writing," approved March 18, 1874, as amended; on days which are holidays in his religion or faith, and on days which are holidays according to the custom of his trade or occupation, if his failure to work on such day is a result of the holiday. In determining the claimant's eligibility for benefits and the amount to be paid him, with respect to the week in which such holiday occurs, he shall have attributed to him as additional earnings for that week an amount equal to one-fifth of his weekly benefit amount for each normal work day on which he does not work because of a holiday of the type above enumerated.

3. An individual shall be deemed unavailable for work if, after his separation from his most recent employing unit, he has removed himself to and remains in a locality where opportunities for work are substantially less favorable than those in the locality he has left.

4. An individual shall be deemed unavailable for work with respect to any week which occurs in a period when his principal occupation is that of a student in attendance at, or on vacation from, a public or private school.

5. Notwithstanding any other provisions of this Act, an individual shall not be deemed unavailable for work or to have failed actively to seek work, nor shall he be ineligible for benefits by reason of the application of the provisions of Section 603, with respect to any week, because he is enrolled in and is in regular attendance at a training course approved for him by the Director:

(a) but only if, with respect to that week, the individual presents, upon request, to the claims adjudicator referred to in Section 702 a statement executed by a responsible person connected with the training course, certifying that the individual was in full-time attendance at such course during the week. The Director may approve such course for an individual only if he finds that (1) reasonable work opportunities for which the individual is fitted by training and experience do not exist in his locality; (2) the training course relates to an occupation or skill for which there are, or are expected to be in the immediate future, reasonable work opportunities in his locality; (3) the training course is offered by a competent and reliable agency, educational institution, or employing unit; (4) the individual has the required qualifications and aptitudes to complete the course successfully; and (5) the individual is not receiving and is not eligible (other than because he has claimed benefits under this Act) for subsistence payments or similar assistance under any public or private retraining program: Provided, that the Director shall not disapprove such course solely by reason of clause (5) if the subsistence payment or similar assistance is subject to reduction by an amount equal to any benefits payable to the individual under this Act in the absence of the clause. In the event that an individual's weekly unemployment compensation benefit is less than his certified training allowance, that person shall be eligible to receive his entire unemployment compensation benefits, plus such supplemental training allowances that would make an applicant's total weekly benefit identical to the original certified training allowance.

(b) The Director shall have the authority to grant approval pursuant to subparagraph (a) above prior to an individual's formal admission into a training course. Requests for approval shall not be made more than 30 days prior to the actual starting date of such course. Requests shall be made at the appropriate unemployment office.

(c) The Director shall for purposes of paragraph C have the authority to issue a blanket approval of training programs implemented pursuant to the federal Workforce Investment Act of 1998 if both the training program and the criteria for an individual's participation in such training meet the requirements of this paragraph C.

(d) Notwithstanding the requirements of subparagraph (a), the Director shall have the authority to issue blanket approval of training programs implemented under the terms of a collective bargaining agreement.

(e) Notwithstanding any other provision of this Act, program services implemented under the Illinois State Training and Employment Program (I-STEP) Act shall constitute training approved pursuant to this paragraph C.

6. Notwithstanding any other provisions of this Act, an individual shall not be deemed unavailable for work or to have failed actively to seek work, nor shall he be ineligible for benefits, by reason of the application of the provisions of Section 603 with respect to any week because he is in training approved under Section 236 (a)(1) of the federal Trade Act of 1974, nor shall an individual be ineligible for benefits under the provisions of Section 601 by reason of leaving work voluntarily to enter such training if the work left is not of a substantially equal or higher skill level than the individual's past adversely affected employment as defined under the federal Trade Act of 1974 and the wages for such work are less than 80% of his average weekly wage as determined under the federal Trade Act of 1974.

D. If his benefit year begins prior to July 6, 1975 or subsequent to January 2, 1982, he has been unemployed for a waiting period of 1 week during such benefit year. If his benefit year begins on or after July 6, l975, but prior to January 3, 1982, and his unemployment continues for more than three weeks during such benefit year, he shall be eligible for benefits with respect to each week of such unemployment, including the first week thereof. An individual shall be deemed to be unemployed within the meaning of this subsection while receiving public assistance as remuneration for services performed on work projects financed from funds made available to governmental agencies for such purpose. No week shall be counted as a week of unemployment for the purposes of this subsection:

1. Unless it occurs within the benefit year which includes the week with respect to which he claims payment of benefits, provided that, for benefit years beginning prior to January 3, 1982, this requirement shall not interrupt the payment of benefits for consecutive weeks of unemployment; and provided further that the week immediately preceding a benefit year, if part of one uninterrupted period of unemployment which continues into such benefit year, shall be deemed (for the purpose of this subsection only and with respect to benefit years beginning prior to January 3, 1982, only) to be within such benefit year, as well as within the preceding benefit year, if the unemployed individual would, except for the provisions of the first paragraph and paragraph 1 of this subsection and of Section 605, be eligible for and entitled to benefits for such week.

2. If benefits have been paid with respect thereto.

3. Unless the individual was eligible for benefits with respect thereto except for the requirements of this subsection and of Section 605.

E. With respect to any benefit year beginning prior to January 3, 1982, he has been paid during his base period wages for insured work not less than the amount specified in Section 500E of this Act as amended and in effect on October 5, 1980. With respect to any benefit year beginning on or after January 3, 1982, he has been paid during his base period wages for insured work equal to not less than $1,600, provided that he has been paid wages for insured work equal to at least $440 during that part of his base period which does not include the calendar quarter in which the wages paid to him were highest.

F. During that week he has participated in reemployment services to which he has been referred, including but not limited to job search assistance services, pursuant to a profiling system established by the Director by rule in conformity with Section 303(j)(1) of the federal Social Security Act, unless the Director determines that:

1. the individual has completed such services; or

2. there is justifiable cause for the claimant's failure to participate in such services.

This subsection F is added by this amendatory Act of 1995 to clarify authority already provided under subsections A and C in connection with the unemployment insurance claimant profiling system required under subsections (a)(10) and (j)(1) of Section 303 of the federal Social Security Act as a condition of federal funding for the administration of the Unemployment Insurance Act.

(Source: P.A. 92-396, eff. 1-1-02.)

(820 ILCS 405/502 new)

Sec. 502. Eligibility for benefits under the Short-Time Compensation Program.

A. The Director may by rule establish a short-time compensation program consistent with this Section. No short-time compensation shall be payable except as authorized by rule.

B. As used in this Section:

"Affected unit" means a specified plant, department, shift, or other definable unit that includes 2 or more workers to which an approved short-time compensation plan applies.

"Health and retirement benefits" means employer-provided health benefits and retirement benefits under a defined benefit pension plan (as defined in Section 414(j) of the Internal Revenue Code) or contributions under a defined contribution plan (defined in Section 414(i) of the Internal Revenue Code), which are incidents of employment in addition to the cash remuneration earned.

"Short-time compensation" means the unemployment benefits payable to employees in an affected unit under an approved short-time compensation plan, as distinguished from the unemployment benefits otherwise payable under this Act.

"Short-time compensation plan" means a plan submitted by an employer, for approval by the Director, under which the employer requests the payment of short-time compensation to workers in an affected unit of the employer to avert layoffs.

"Usual weekly hours of work" means the usual hours of work for full-time or part-time employees in the affected unit when that unit is operating on its regular basis, not to exceed 40 hours and not including hours of overtime work.

"Unemployment insurance" means the unemployment benefits payable under this Act other than short-time compensation and includes any amounts payable pursuant to an agreement under any Federal law providing for compensation, assistance, or allowances with respect to unemployment.

C. An employer wishing to participate in the short-time compensation program shall submit a signed written short-time compensation plan to the Director for approval. The Director shall develop an application form to request approval of a short-time compensation plan and an approval process. The application shall include:

1. The employer's unemployment insurance account number, the affected unit covered by the plan, including the number of full-time or part-time workers in such unit, the percentage of workers in the affected unit covered by the plan, identification of each individual employee in the affected unit by name and social security number, and any other information required by the Director to identify plan participants.

2. A description of how workers in the affected unit will be notified of the employer's participation in the short-time compensation plan if such application is approved, including how the employer will notify those workers in a collective bargaining unit as well as any workers in the affected unit who are not in a collective bargaining unit. If the employer will not provide advance notice to workers in the affected unit, the employer shall explain in a statement in the application why it is not feasible to provide such notice.

3. The employer's certification that it has the approval of the plan from all collective bargaining representatives of employees in the affected unit and has notified all employees in the affected unit who are not in a collective bargaining unit of the plan.

4. The employer's certification that it will not hire additional part-time or full-time employees for, or transfer employees to, the affected unit, while the program is in operation.

5. A requirement that the employer identify the usual weekly hours of work for employees in the affected unit and the specific percentage by which their hours will be reduced during all weeks covered by the plan. An application shall specify the percentage of reduction for which a short-time compensation application may be approved which shall be not less than 20% and not more than 60%. If the plan includes any week for which the employer regularly provides no work (due to a holiday or other plant closing), then such week shall be identified in the application.

6. Certification by the employer that, if the employer provides health and retirement benefits to any employee whose usual weekly hours of work are reduced under the program, such benefits will continue to be provided to the employee participating in the short-time compensation program under the same terms and conditions as though the usual weekly hours of work of such employee had not been reduced or to the same extent as other employees not participating in the short-time compensation program. For defined benefit retirement plans, the hours that are reduced under the short-time compensation plan shall be credited for purposes of participation, vesting, and accrual of benefits as though the usual weekly hours of work had not been reduced. The dollar amount of employer contributions to a defined contribution plan that are based on a percentage of compensation may be less due to the reduction in the employee's compensation. Notwithstanding any other provision to the contrary, a certification that a reduction in health and retirement benefits is scheduled to occur during the duration of the plan and will be applicable equally to employees who are not participating in the short-time compensation program and to those employees who are participating satisfies this paragraph.

7. Certification by the employer that the aggregate reduction in work hours is in lieu of layoffs (temporary or permanent layoffs, or both). The application shall include an estimate of the number of workers who would have been laid off in the absence of the short-time compensation plan.

8. Agreement by the employer to: furnish reports to the Director relating to the proper conduct of the plan; allow the Director or his or her authorized representatives access to all records necessary to approve or disapprove the plan application, and after approval of a plan, to monitor and evaluate the plan; and follow any other directives the Director deems necessary for the agency to implement the plan and which are consistent with the requirements for plan applications.

9. Certification by the employer that participation in the short-time compensation plan and its implementation is consistent with the employer's obligations under applicable Federal and Illinois laws.

10. The effective date and duration of the plan, which shall expire no later than the end of the 12th full calendar month after the effective date.

11. Any other provision added to the application by the Director that the United States Secretary of Labor determines to be appropriate for purposes of a short-time compensation program.

D. The Director shall approve or disapprove a short-time compensation plan in writing within 45 days of its receipt and promptly communicate the decision to the employer. A decision disapproving the plan shall clearly identify the reasons for the disapproval. The disapproval shall be final, but the employer shall be allowed to submit another short-time compensation plan for approval not earlier than 30 days from the date of the disapproval.

E. The short-time compensation plan shall be effective on the mutually agreed upon date by the employer and the Director, which shall be specified in the notice of approval to the employer. The plan shall expire on the date specified in the notice of approval, which shall be mutually agreed on by the employer and Director but no later than the end of the 12th full calendar month after its effective date. However, if a short-time compensation plan is revoked by the Director, the plan shall terminate on the date specified in the Director's written order of revocation. An employer may terminate a short-time compensation plan at any time upon written notice to the Director. Upon receipt of such notice from the employer, the Director shall promptly notify each member of the affected unit of the termination date. An employer may submit a new application to participate in another short-time compensation plan at any time after the expiration or termination date.

F. The Director may revoke approval of a short-time compensation plan for good cause at any time, including upon the request of any of the affected unit's employees or their collective bargaining representative. The revocation order shall be in writing and shall specify the reasons for the revocation and the date the revocation is effective. The Director may periodically review the operation of each employer's short-time compensation plan to assure that no good cause exists for revocation of the approval of the plan. Good cause shall include, but not be limited to, failure to comply with the assurances given in the plan, termination of the approval of the plan by a collective bargaining representative of employees in the affected unit, unreasonable revision of productivity standards for the affected unit, conduct or occurrences tending to defeat the intent and effective operation of the short-time compensation plan, and violation of any criteria on which approval of the plan was based.

G. An employer may request a modification of an approved plan by filing a written request to the Director. The request shall identify the specific provisions proposed to be modified and provide an explanation of why the proposed modification is appropriate for the short-time compensation plan. The Director shall approve or disapprove the proposed modification in writing within 30 days of receipt and promptly communicate the decision to the employer. The Director, in his or her discretion, may approve a request for modification of the plan based on conditions that have changed since the plan was approved provided that the modification is consistent with and supports the purposes for which the plan was initially approved. A modification may not extend the expiration date of the original plan, and the Director must promptly notify the employer whether the plan modification has been approved and, if approved, the effective date of modification. An employer is not required to request approval of plan modification from the Director if the change is not substantial, but the employer must report every change to plan to the Director promptly and in writing. The Director may terminate an employer's plan if the employer fails to meet this reporting requirement. If the Director determines that the reported change is substantial, the Director shall require the employer to request a modification to the plan.

H. An individual is eligible to receive short-time compensation with respect to any week only if the individual is eligible for unemployment insurance pursuant to subsection E of Section 500, not otherwise disqualified for unemployment insurance, and:

1. During the week, the individual is employed as a member of an affected unit under an approved short-time compensation plan, which was approved prior to that week, and the plan is in effect with respect to the week for which short-time compensation is claimed.

2. Notwithstanding any other provision of this Act relating to availability for work and actively seeking work, the individual is available for the individual's usual hours of work with the short-time compensation employer, which may include, for purposes of this Section, participating in training to enhance job skills that is approved by the Director, including but not limited to as employer-sponsored training or training funded under the Workforce Investment Act of 1998.

3. Notwithstanding any other provision of law, an individual covered by a short-time compensation plan is deemed unemployed in any week during the duration of such plan if the individual's remuneration as an employee in an affected unit is reduced based on a reduction of the individual's usual weekly hours of work under an approved short-time compensation plan.

I. The short-time compensation weekly benefit amount shall be the product of the percentage of reduction in the individual's usual weekly hours of work multiplied by the sum of the regular weekly benefit amount for a week of total unemployment plus any applicable dependent allowance pursuant to subsection C of Section 401.

1. An individual may be eligible for short-time compensation or unemployment insurance, as appropriate, except that no individual shall be eligible for combined benefits (excluding any payments attributable to a dependent allowance pursuant to subsection C of Section 401) in any benefit year in an amount more than the maximum benefit amount, nor shall an individual be paid short-time compensation benefits for more than 52 weeks under a short-time compensation plan.

2. The short-time compensation paid to an individual (excluding any payments attributable to a dependent allowance pursuant to subsection C of Section 401) shall be deducted from the maximum benefit amount established for that individual's benefit year.

3. Provisions applicable to unemployment insurance claimants shall apply to short-time compensation claimants to the extent that they are not inconsistent with short-time compensation provisions. An individual who files an initial claim for short-time compensation benefits shall receive a monetary determination.

4. The following provisions apply to individuals who work for both a short-time compensation employer and another employer during weeks covered by the approved short-time compensation plan:

i. If combined hours of work in a week for both employers do not result in a reduction of at least 20% of the usual weekly hours of work with the short-time compensation employer, the individual shall not be entitled to benefits under this Section.

ii. If combined hours of work for both employers results in a reduction equal to or greater than 20% of the usual weekly hours of work for the short-time compensation employer, the short-time compensation benefit amount payable to the individual is reduced for that week and is determined by multiplying the percentage by which the combined hours of work have been reduced by the sum of the weekly benefit amount for a week of total unemployment plus any applicable dependent allowance pursuant to subsection C of Section 401. A week for which benefits are paid under this subparagraph shall be reported as a week of short-time compensation.

iii. If an individual worked the reduced percentage of the usual weekly hours of work for the short-time compensation employer and is available for all his or her usual hours of work with the short-time compensation employer, and the individual did not work any hours for the other employer either because of the lack of work with that employer or because the individual is excused from work with the other employer, the individual shall be eligible for short-time compensation for that week. The benefit amount for such week shall be calculated as provided in the introductory clause of this subsection I.

iv. An individual who is not provided any work during a week by the short-time compensation employer, or any other employer, and who is otherwise eligible for unemployment insurance shall be eligible for the amount of regular unemployment insurance determined without regard to this Section.

v. An individual who is not provided any work by the short-time compensation employer during a week, but who works for another employer and is otherwise eligible may be paid unemployment insurance for that week subject to the disqualifying income and other provisions applicable to claims for regular unemployment insurance.

J. Short-time compensation shall be charged to employers in the same manner as unemployment insurance is charged under Illinois law. Employers liable for payments in lieu of contributions shall have short-time compensation attributed to service in their employ in the same manner as unemployment insurance is attributed. Notwithstanding any other provision to the contrary, to the extent that short-term compensation payments under this Section are reimbursed by the federal government, no benefit charges or payments in lieu of contributions shall be accrued by a participating employer.

K. A short-time compensation plan shall not be approved for an employer that is delinquent in the filing of any reports required or the payment of contributions, payments in lieu of contributions, interest, or penalties due under this Act through the date of the employer's application.

L. Overpayments of other benefits under this Act may be recovered from an individual receiving short-time compensation under this Act in the manner provided under Sections 900 and 901. Overpayments under the short-time compensation plan may be recovered from an individual receiving other benefits under this Act in the manner provided under Sections 900 and 901.

M. An individual who has received all of the short-time compensation or combined unemployment insurance and short-time compensation available in a benefit year shall be considered an exhaustee for purposes of extended benefits, as provided under the provisions of Section 409, and, if otherwise eligible under those provisions, shall be eligible to receive extended benefits.

(820 ILCS 405/611) (from Ch. 48, par. 441)

Sec. 611. Retirement pay. A. For the purposes of this Section "disqualifying income" means:

1. The entire amount which an individual has received or will receive with respect to a week in the form of a retirement payment (a) from an individual or organization (i) for which he performed services during his base period or which is liable for benefit charges or payments in lieu of contributions as a result of the payment of benefits to such individual and (ii) which pays all of the cost of such retirement payment, or (b) from a trust, annuity or insurance fund or under an annuity or insurance contract, to or under which an individual or organization for which he performed services during his base period or which is liable for benefit charges or payments in lieu of contributions as a result of the payment of benefits to such individual pays or has paid all of the premiums or contributions; and

2. One-half the amount which an individual has received or will receive with respect to a week in the form of a retirement payment (a) from an individual or organization (i) for which he performed services during his base period or which is liable for benefit charges or payments in lieu of contributions as a result of the payment of benefits to such individual and (ii) which pays some, but not all, of the cost of such retirement payment, or (b) from a trust, annuity or insurance fund (including primary social security old age and disability retirement benefits, including those based on self-employment) or under an annuity or insurance contract, to or under which an individual or organization for which he performed services during his base period or which is liable for benefit charges or payments in lieu of contributions as a result of the payment of benefits to such individual pays or has paid some, but not all, of the premiums or contributions.

2.1. Notwithstanding paragraphs 1 and 2 above, none of the amount that an individual has received or will receive with respect to a week in the form of social security old age, survivors, and disability benefits under 42 U.S.C. Section 401 et seq., including those based on self-employment, shall constitute disqualifying income.

3. Notwithstanding paragraphs paragraph 1, and 2, and 2.1 above, the entire amount which an individual has received or will receive, with respect to any week which begins after March 31, 1980, of any governmental or other pension, retirement, or retired pay, annuity or any other similar periodic payment which is based on any previous work of such individual during his base period or which is liable for benefit charges or payments in lieu of contributions as a result of the payment of benefits to such individual. This paragraph shall be in effect only if it is required as a condition for full tax credit against the tax imposed by the Federal Unemployment Tax Act.

B. Whenever an individual has received or will receive a retirement payment for a month, an amount shall be deemed to have been paid him for each day equal to one-thirtieth of such retirement payment. If the retirement payment is for a half-month, an amount shall be deemed to have been paid the individual for each day equal to one-fifteenth of such retirement payment. If the retirement payment is for any other period, an amount shall be deemed to have been paid the individual for each day in such period equal to the retirement payment divided by the number of days in the period.

C. An individual shall be ineligible for benefits for any week with respect to which his disqualifying income equals or exceeds his weekly benefit amount. If such disqualifying income with respect to a week totals less than the benefits for which he would otherwise be eligible under this Act, he shall be paid, with respect to such week, benefits reduced by the amount of such disqualifying income.

D. To assure full tax credit to the employers of this State against the tax imposed by the Federal Unemployment Tax Act, the Director shall take any action as may be necessary in the administration of paragraph 3 of subsection A of this Section to insure that the application of its provisions conform to the requirements of such Federal Act as interpreted by the United States Secretary of Labor or other appropriate Federal agency.

(Source: P.A. 86-3.)

(820 ILCS 405/702) (from Ch. 48, par. 452)

Sec. 702. Determinations. The claims adjudicator shall for each week with respect to which the claimant claims benefits or waiting period credit, make a "determination" which shall state whether or not the claimant is eligible for such benefits or waiting period credit and the sum to be paid the claimant with respect to such week. The claims adjudicator shall promptly notify the claimant and such employing unit as shall, within the time and in the manner prescribed by the Director, have filed a sufficient allegation that the claimant is ineligible to receive benefits or waiting period credit for said week, of his "determination" and the reasons therefor. The Director may, by rule adopted with the advice and aid of the Employment Security Advisory Board, require that an employing unit with 25 50 or more individuals in its employ during a the prior calendar year, or an entity representing 5 or more employing units during a the prior calendar year, file an allegation of ineligibility electronically in a manner prescribed by the Director for the one year period commencing on July 1 of the immediately succeeding calendar year and ending on June 30 of the second succeeding calendar year. In making his "determination," the claims adjudicator shall give consideration to the information, if any, contained in the employing unit's allegation, whether or not the allegation is sufficient. The claims adjudicator shall deem an employing unit's allegation sufficient only if it contains a reason or reasons therefor (other than general conclusions of law, and statements such as "not actively seeking work" or "not available for work" shall be deemed, for this purpose, to be conclusions of law). If the claims adjudicator deems an allegation insufficient, he shall make a decision accordingly, and shall notify the employing unit of such decision and the reasons therefor. Such decision may be appealed by the employing unit to a Referee within the time limits prescribed by Section 800 for appeal from a "determination". Any such appeal, and any appeal from the Referee's decision thereon, shall be governed by the applicable provisions of Sections 801, 803, 804 and 805.

(Source: P.A. 97-621, eff. 11-18-11.)

(820 ILCS 405/1402) (from Ch. 48, par. 552)

Sec. 1402. Penalties.

A. If any employer fails, within the time prescribed in this Act as amended and in effect on October 5, 1980, and the regulations of the Director, to file a report of wages paid to each of his workers, or to file a sufficient report of such wages after having been notified by the Director to do so, for any period which begins prior to January 1, 1982, he shall pay to the Department as a penalty a sum determined in accordance with the provisions of this Act as amended and in effect on October 5, 1980.

B. Except as otherwise provided in this Section, any employer who fails to file a report of wages paid to each of his workers for any period which begins on or after January 1, 1982, within the time prescribed by the provisions of this Act and the regulations of the Director, or, if the Director pursuant to such regulations extends the time for filing the report, fails to file it within the extended time, shall, in addition to any sum otherwise payable by him under the provisions of this Act, pay to the Department as a penalty a sum equal to the lesser of (1) $5 for each $10,000 or fraction thereof of the total wages for insured work paid by him during the period or (2) $2,500, for each month or part thereof of such failure to file the report. With respect to an employer who has elected to file reports of wages on an annual basis pursuant to Section 1400.2, in assessing penalties for the failure to submit all reports by the due date established pursuant to that Section, the 30-day period immediately following the due date shall be considered as one month.

If the Director deems an employer's report of wages paid to each of his workers for any period which begins on or after January 1, 1982, insufficient, he shall notify the employer to file a sufficient report. If the employer fails to file such sufficient report within 30 days after the mailing of the notice to him, he shall, in addition to any sum otherwise payable by him under the provisions of this Act, pay to the Department as a penalty a sum determined in accordance with the provisions of the first paragraph of this subsection, for each month or part thereof of such failure to file such sufficient report after the date of the notice.

For wages paid in calendar years prior to 1988, the penalty or penalties which accrue under the two foregoing paragraphs with respect to a report for any period shall not be less than $100, and shall not exceed the lesser of (1) $10 for each $10,000 or fraction thereof of the total wages for insured work paid during the period or (2) $5,000. For wages paid in calendar years after 1987, the penalty or penalties which accrue under the 2 foregoing paragraphs with respect to a report for any period shall not be less than $50, and shall not exceed the lesser of (1) $10 for each $10,000 or fraction of the total wages for insured work paid during the period or (2) $5,000. With respect to an employer who has elected to file reports of wages on an annual basis pursuant to Section 1400.2, for purposes of calculating the minimum penalty prescribed by this Section for failure to file the reports on a timely basis, a calendar year shall constitute a single period. For reports of wages paid after 1986, the Director shall not, however, impose a penalty pursuant to either of the two foregoing paragraphs on any employer who can prove within 30 working days after the mailing of a notice of his failure to file such a report, that (1) the failure to file the report is his first such failure during the previous 20 consecutive calendar quarters, and (2) the amount of the total contributions due for the calendar quarter of such report (or, in the case of an employer who is required to file the reports on a monthly basis, the amount of the total contributions due for the calendar quarter that includes the month of such report) is less than $500.

For any month which begins on or after January 1, 2013, a report of the wages paid to each of an employer's workers shall be due on or before the last day of the month next following the calendar month in which the wages were paid if the employer is required to report such wages electronically pursuant to the regulations of the Director; otherwise a report of the wages paid to each of the employer's workers shall be due on or before the last day of the month next following the calendar quarter in which the wages were paid.

Any employer who willfully wilfully fails to pay any contribution or part thereof, based upon wages paid prior to 1987, when required by the provisions of this Act and the regulations of the Director, with intent to defraud the Director, shall in addition to such contribution or part thereof pay to the Department a penalty equal to 50 percent of the amount of such contribution or part thereof, as the case may be, provided that the penalty shall not be less than $200.

Any employer who willfully fails to pay any contribution or part thereof, based upon wages paid in 1987 and in each calendar year thereafter, when required by the provisions of this Act and the regulations of the Director, with intent to defraud the Director, shall in addition to such contribution or part thereof pay to the Department a penalty equal to 60% of the amount of such contribution or part thereof, as the case may be, provided that the penalty shall not be less than $400.

However, all or part of any penalty may be waived by the Director for good cause shown.

C. With regard to an employer required to report monthly pursuant to this Section, in addition to each employee's name, social security number, and wages for insured work paid during the period, the Director may, by rule, require a report to provide the following information concerning each employee: the employee's occupation, hours worked during the period, hourly wage, if applicable, and work location if the employer has more than one physical location. Notwithstanding any other provision of any other law to the contrary, information obtained pursuant to this subsection shall not be disclosed to any other public official or agency of this State or any other state to the extent it relates to a specifically identified individual or entity or to the extent that the identity of a specific individual or entity may be discerned from such information. The additional data elements required to be reported pursuant to the rule authorized by this subsection may be reported in the same electronic format as in the system maintained by the employer or employer's agent and need not be reformatted.

(Source: P.A. 97-689, eff. 6-14-12; 97-791, eff. 1-1-13; 98-463, eff. 8-16-13.)

(820 ILCS 405/1402.1 new)

Sec. 1402.1. Processing fee.

A. The Director may, by rule, establish a processing fee of $50 with regard to a report of contributions due that is not required to be submitted electronically if the employer fails to submit the report on the form designated by the Director or otherwise provide all of the information required by the form designated by the Director. With respect to the first instance of such a failure after the effective date of the rule, the Director shall issue the employer a written warning instead of a processing fee, and no such processing fee shall be assessed unless the Director has issued the employer a written warning for a prior failure.

B. The Director may, by rule, establish a processing fee of $50 with regard to any payment of contributions, payment in lieu of contributions, interest, or penalty that is not made through electronic funds transfer if the employer fails to enclose the payment coupon provided by the Director with its payment or otherwise provide all of the information the coupon would provide, regardless of the amount due. With respect to the first instance of such a failure after the effective date of the rule, the Director shall issue the employer a written warning instead of a processing fee, and no such processing fee shall be assessed unless the Director has issued the employer a written warning for a prior failure.

(820 ILCS 405/1500) (from Ch. 48, par. 570)

Sec. 1500. Rate of contribution.

A. For the six months' period beginning July 1, 1937, and for each of the calendar years 1938 to 1959, inclusive, each employer shall pay contributions on wages at the percentages specified in or determined in accordance with the provisions of this Act as amended and in effect on July 11, 1957.

B. For the calendar years 1960 through 1983, each employer shall pay contributions equal to 2.7 percent with respect to wages for insured work paid during each such calendar year, except that the contribution rate of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined, shall be determined as provided in Sections 1501 to 1507, inclusive.

For the calendar year 1984 and each calendar year thereafter, each employer shall pay contributions at a percentage rate equal to the greatest of 2.7%, or 2.7% multiplied by the current adjusted State experience factor, as determined for each calendar year by the Director in accordance with the provisions of Sections 1504 and 1505, or the average contribution rate for his major classification in the Standard Industrial Code, or another classification sanctioned by the United States Department of Labor and prescribed by the Director by rule, with respect to wages for insured work paid during such year. The Director of Employment Security shall determine for calendar year 1984 and each calendar year thereafter by a method pursuant to adopted rules each individual employer's industrial code and the average contribution rate for each major classification in the Standard Industrial Code, or each other classification sanctioned by the United States Department of Labor and prescribed by the Director by rule. Notwithstanding the preceding provisions of this paragraph, the contribution rate for calendar years 1984, 1985 and 1986 of each employer who has incurred liability for the payment of contributions within each of the two calendar years immediately preceding the calendar year for which a rate is being determined, and the contribution rate for calendar year 1987 and each calendar year thereafter of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be determined as provided in Sections 1501 to 1507.1, inclusive. Provided, however, that the contribution rate for calendar years 1989 and 1990 of each employer who has had experience with the risk of unemployment for at least 13 consecutive months ending June 30 of the preceding calendar year shall be a rate determined in accordance with this Section or a rate determined as if it had been calculated in accordance with Sections 1501 through 1507, inclusive, whichever is greater, except that for purposes of calculating the benefit wage ratio as provided in Section 1503, such benefit wage ratio shall be a percentage equal to the total of benefit wages for the 12 consecutive calendar month period ending on the above preceding June 30, divided by the total wages for insured work subject to the payment of contributions under Sections 234, 235 and 245 for the same period and provided, further, however, that the contribution rate for calendar year 1991 and for each calendar year thereafter of each employer who has had experience with the risk of unemployment for at least 13 consecutive months ending June 30 of the preceding calendar year shall be a rate determined in accordance with this Section or a rate determined as if it had been calculated in accordance with Sections 1501 through 1507.1, inclusive, whichever is greater, except that for purposes of calculating the benefit ratio as provided in Section 1503.1, such benefit ratio shall be a percentage equal to the total of benefit charges for the 12 consecutive calendar month period ending on the above preceding June 30, multiplied by the benefit conversion factor applicable to such year, divided by the total wages for insured work subject to the payment of contributions under Sections 234, 235 and 245 for the same period.

B-5. Notwithstanding any other provision of this Section, beginning in calendar year 2015, an employer's contribution rate as determined pursuant to subsection B shall be reduced by 0.04% absolute. This amendatory Act of the 98th General Assembly has no effect on the fund building rate determined pursuant to Section 1506.3 or fund building receipts attributable to the fund building rate.

C. Except as expressly provided in this Act, the provisions of Sections 1500 to 1510, inclusive, do not apply to any nonprofit organization for any period with respect to which it does not incur liability for the payment of contributions by reason of having elected to make payments in lieu of contributions, or to any political subdivision or municipal corporation for any period with respect to which it is not subject to payments in lieu of contributions under the provisions of paragraph 1 of Section 302C by reason of having elected to make payments in lieu of contributions under paragraph 2 of that Section or to any governmental entity referred to in clause (B) of Section 211.1. Wages paid to an individual which are subject to contributions under Section 1405 A, or on the basis of which benefits are paid to him which are subject to payment in lieu of contributions under Sections 1403, 1404, or 1405 B, or under paragraph 2 of Section 302C, shall not become benefit wages or benefit charges under the provisions of Sections 1501 or 1501.1, respectively, except for purposes of determining a rate of contribution for 1984 and each calendar year thereafter for any governmental entity referred to in clause (B) of Section 211.1 which does not elect to make payments in lieu of contributions.

D. If an employer's business is closed solely because of the entrance of one or more of the owners, partners, officers, or the majority stockholder into the armed forces of the United States, or of any of its allies, or of the United Nations, and, if the business is resumed within two years after the discharge or release of such person or persons from active duty in the armed forces, the employer will be deemed to have incurred liability for the payment of contributions continuously throughout such period. Such an employer, for the purposes of Section 1506.1, will be deemed to have paid contributions upon wages for insured work during the applicable period specified in Section 1503 on or before the date designated therein, provided that no wages became benefit wages during the applicable period specified in Section 1503.

(Source: P.A. 94-301, eff. 1-1-06.)

(820 ILCS 405/1506.1) (from Ch. 48, par. 576.1)

Sec. 1506.1. Determination of Employer's Contribution Rate.

A. The contribution rate for any calendar year prior to 1991 of each employer whose contribution rate is determined as provided in Sections 1501 through 1507, inclusive, shall be determined in accordance with the provisions of this Act as amended and in effect on November 18, 2011.

B. (Blank).

C. (Blank).

D. (Blank).

E. The contribution rate for calendar year 1991 and each calendar year thereafter of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit ratio defined by Section 1503.1 for that calendar year by the adjusted state experience factor for the same year, provided that:

1. Except as otherwise provided in this paragraph, an employer's minimum contribution rate shall be the greater of 0.2% or the product obtained by multiplying 0.2% by the adjusted state experience factor for the applicable calendar year. An employer's minimum contribution rate shall be 0.1% for calendar year 1996. An employer's minimum contribution rate shall be 0.0% for calendar years 2012 through 2019.

2. An employer's maximum contribution rate shall be the greater of 6.4% or the product of 6.4% and the adjusted state experience factor for the applicable calendar year.

3. If any product obtained in this subsection is not an exact multiple of one-tenth of one percent, it shall be increased or reduced, as the case may be to the nearer multiple of one-tenth of one percent. If such product is equally near to two multiples of one-tenth of one percent, it shall be increased to the higher multiple of one-tenth of one percent.

4. For purposes of this subsection, intermediate Intermediate rates between such minimum and maximum rates shall be at one-tenth of one percent intervals.

The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503 or for whom benefit payments became benefit charges during the applicable period specified in Section 1503.1, but who did not report wages for insured work during such period, shall be the maximum contribution rate as determined by paragraph 2 of this subsection. The contribution rate for each employer for whom no wages became benefit wages during the applicable period specified in Section 1503 or for whom no benefit payments became benefit charges during the applicable period specified in Section 1503.1, and who did not report wages for insured work during such period, shall be the greater of 2.7% or 2.7% times the then current adjusted state experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505.

F. (Blank).

G. Notwithstanding the other provisions of this Section, no employer's contribution rate with respect to calendar year 1989 and each calendar year thereafter shall exceed 5.4% of the wages for insured work paid by him during any calendar quarter, if such wages paid during such calendar quarter total less than $50,000, plus any applicable penalty contribution rate calculated pursuant to subsection C of Section 1507.1.

H. Notwithstanding any other provision of this Section, beginning in calendar year 2015, an employer's contribution rate as determined under this Section, without regard to this subsection, shall be reduced by 0.04% absolute but not below 0.0%. This amendatory Act of the 98th General Assembly has no effect on the fund building rate determined pursuant to Section 1506.3 or fund building receipts attributable to the fund building rate.

(Source: P.A. 97-621, eff. 11-18-11; 97-791, eff. 1-1-13.)

(820 ILCS 405/2101) (from Ch. 48, par. 661)

Sec. 2101. Special administrative account. Except as provided in Section 2100, all interest and penalties collected pursuant to this Act shall be deposited in the special administrative account. The amount in this account in excess of $100,000 on the close of business of the last day of each calendar quarter shall be immediately transferred to this State's account in the unemployment trust fund. However, subject to Section 2101.1, such funds shall not be transferred where it is determined by the Director that it is necessary to accumulate funds in the account in order to have sufficient funds to pay interest that may become due under the terms of Section 1202 (b) of the Federal Social Security Act, as amended, upon advances made to the Illinois Unemployment Insurance Trust Fund under Title XII of the Federal Social Security Act or where it is determined by the Director that it is necessary to accumulate funds in the special administrative account in order to have sufficient funds to expend for any other purpose authorized by this Section. The balance of funds in the special administrative account that are in excess of $100,000 on the first day of each calendar quarter and not transferred to this State's account in the unemployment trust fund, minus the amount reasonably anticipated to be needed to make payments from the special administrative account pursuant to subsections C through I, shall be certified by the Director and transferred by the State Comptroller to the Title III Social Security and Employment Fund in the State Treasury within 30 days of the first day of the calendar quarter. The Director may certify and the State Comptroller shall transfer such funds to the Title III Social Security and Employment Fund on a more frequent basis. The moneys available in the special administrative account shall be expended upon the direction of the Director whenever it appears to him that such expenditure is necessary for:

A. 1. The proper administration of this Act and no Federal funds are available for the specific purpose for which such expenditure is to be made, provided the moneys are not substituted for appropriations from Federal funds, which in the absence of such moneys would be available and provided the monies are appropriated by the General Assembly.

2. The proper administration of this Act for which purpose appropriations from Federal funds have been requested but not yet received, provided the special administrative account will be reimbursed upon receipt of the requested Federal appropriation.

B. To the extent possible, the repayment to the fund established for financing the cost of administration of this Act of moneys found by the Secretary of Labor of the United States of America, or other appropriate Federal agency, to have been lost or expended for purposes other than, or in amounts in excess of, those found necessary by the Secretary of Labor, or other appropriate Federal agency, for the administration of this Act.

C. The payment of refunds or adjustments of interest or penalties, paid pursuant to Sections 901 or 2201.

D. The payment of interest on refunds of erroneously paid contributions, penalties and interest pursuant to Section 2201.1.

E. The payment or transfer of interest or penalties to any Federal or State agency, pursuant to reciprocal arrangements entered into by the Director under the provisions of Section 2700E.

F. The payment of any costs incurred, pursuant to Section 1700.1.

G. Beginning January 1, 1989, for the payment for the legal services authorized by subsection B of Section 802, up to $1,000,000 per year for the representation of the individual claimants and up to $1,000,000 per year for the representation of "small employers".

H. The payment of any fees for collecting past due contributions, payments in lieu of contributions, penalties, and interest shall be paid (without an appropriation) from interest and penalty monies received from collection agents that have contracted with the Department under Section 2206 to collect such amounts, provided however, that the amount of such payment shall not exceed the amount of past due interest and penalty collected.

I. The payment of interest that may become due under the terms of Section 1202 (b) of the Federal Social Security Act, as amended, for advances made to the Illinois Unemployment Insurance Trust Fund.

J. Expenses incurred by the Department in the administration of the Illinois State Training and Employment Program (I-STEP) Act.

The Director shall annually on or before the first day of March report in writing to the Employment Security Advisory Board concerning the expenditures made from the special administrative account and the purposes for which funds are being accumulated.

If Federal legislation is enacted which will permit the use by the Director of some part of the contributions collected or to be collected under this Act, for the financing of expenditures incurred in the proper administration of this Act, then, upon the availability of such contributions for such purpose, the provisions of this Section shall be inoperative and interest and penalties collected pursuant to this Act shall be deposited in and be deemed a part of the clearing account. In the event of the enactment of the foregoing Federal legislation, and within 90 days after the date upon which contributions become available for expenditure for costs of administration, the total amount in the special administrative account shall be transferred to the clearing account, and after clearance thereof shall be deposited with the Secretary of the Treasury of the United States of America to the credit of the account of this State in the unemployment trust fund, established and maintained pursuant to the Federal Social Security Act, as amended.

(Source: P.A. 94-1083, eff. 1-19-07.)

(820 ILCS 405/2201) (from Ch. 48, par. 681)

Sec. 2201. Refund or adjustment of contributions. Not later than 3 years after the date upon which the Director first notifies any contributions, interest or penalties thereon were paid, an employing unit that it which has paid such contributions, interest or penalties thereon erroneously, the employing unit may file a claim with the Director for an adjustment thereof in connection with subsequent contribution payments, or for a refund thereof where such adjustment cannot be made; provided, however, that no refund or adjustment shall be made of any contribution, the amount of which has been determined and assessed by the Director, if such contribution was paid after the determination and assessment of the Director became final, and provided, further, that any such adjustment or refund, involving contributions with respect to wages on the basis of which benefits have been paid, shall be reduced by the amount of benefits so paid. Upon receipt of a claim the Director shall make his determination, either allowing such claim in whole or in part, or ordering that it be denied, and serve notice upon the claimant of such determination. Such determination of the Director shall be final at the expiration of 20 days from the date of service of such notice unless the claimant shall have filed with the Director a written protest and a petition for hearing, specifying his objections thereto. Upon receipt of such petition within the 20 days allowed, the Director shall fix the time and place for a hearing and shall notify the claimant thereof. At any hearing held as herein provided, the determination of the Director shall be prima facie correct and the burden shall be upon the protesting employing unit to prove that it is incorrect. All of the provisions of this Act applicable to hearings conducted pursuant to Section 2200 shall be applicable to hearings conducted pursuant to this Section. Upon the conclusion of such hearing, a decision shall be made by the Director and notice thereof given to the claimant. If the Director shall decide that the claim be allowed in whole or in part, or if such allowance be ordered by the Court pursuant to Section 2205 and the judgment of said Court has become final, the Director shall, if practicable, make adjustment without interest in connection with subsequent contribution payments by the claimant, and if adjustments thereof cannot practicably be made in connection with such subsequent contribution payments, then the Director shall refund to the claimant the amount so allowed, without interest except as otherwise provided in Section 2201.1 from moneys in the benefit account established by this Act. Nothing herein contained shall prohibit the Director from making adjustment or refund upon his own initiative, within the time allowed for filing claim therefor, provided that the Director shall make no refund or adjustment of any contribution, the amount of which he has previously determined and assessed, if such contribution was paid after the determination and assessment became final.

If this State should not be certified for any year by the Secretary of Labor of the United States of America, or other appropriate Federal agency, under Section 3304 of the Federal Internal Revenue Code of 1954, the Director shall refund without interest to any instrumentality of the United States subject to this Act by virtue of permission granted in an Act of Congress, the amount of contributions paid by such instrumentality with respect to such year.

The Director may by regulation provide that, if there is a total credit balance of less than $2 in an employer's account with respect to contributions, interest, and penalties, the amount may be disregarded by the Director; once disregarded, the amount shall not be considered a credit balance in the account and shall not be subject to either an adjustment or a refund.

(Source: P.A. 90-554, eff. 12-12-97.)

(820 ILCS 405/2201.1) (from Ch. 48, par. 681.1)

Sec. 2201.1. Interest on Overpaid Contributions, Penalties and Interest. The Director shall semi-annually quarterly furnish each employer with a statement of credit balances in the employer's account where the balances with respect to all contributions, interest and penalties combined equal or exceed $2. Under regulations prescribed by the Director and subject to the limitations of Section 2201, the employer may file a request for an adjustment or refund of the amount erroneously paid. Interest shall be paid on refunds of erroneously paid contributions, penalties and interest imposed by this Act, except that if any refund is mailed by the Director within 90 days after the date of the refund claim, no interest shall be due or paid. The interest shall begin to accrue as of the date of the refund claim and shall be paid at the rate of 1.5% per month computed at the rate of 12/365 of 1.5% for each day or fraction thereof. Interest paid pursuant to this Section shall be paid from monies in the special administrative account established by Sections 2100 and 2101. This Section shall apply only to refunds of contributions, penalties and interest which were paid as the result of wages paid after January 1, 1988.

(Source: P.A. 90-554, eff. 12-12-97.)

(820 ILCS 405/2401) (from Ch. 48, par. 721)

(Text of Section after amendment by P.A. 98-107)

Sec. 2401. Recording and release of lien. A. The lien created by Section 2400 shall be invalid only as to any innocent purchaser for value of stock in trade of any employer in the usual course of such employer's business, and shall be invalid as to any innocent purchaser for value of any of the other assets to which such lien has attached, unless notice thereof has been filed by the Director in the office of the recorder of the county within which the property subject to the lien is situated. The Director may, in his discretion, for good cause shown and upon the reimbursement of any recording fees paid by the Director with respect to the lien, issue a certificate of withdrawal of notice of lien filed against any employer, which certificate shall be recorded in the same manner as herein provided for the recording of notice of liens. Such withdrawal of notice of lien shall invalidate such lien as against any person acquiring any of such employer's property or any interest therein, subsequent to the recordation of the withdrawal of notice of lien, but shall not otherwise affect the validity of such lien, nor shall it prevent the Director from re-recording notice of such lien. In the event notice of such lien is re-recorded, such notice shall be effective as against third persons only as of the date of such re-recordation.

B. The recorder of each county shall procure at the expense of the county a file labeled "Unemployment Compensation Contribution Lien Notice" and an index book labeled "Unemployment Compensation Contribution Lien Index." When a notice of any such lien is presented to him for filing, he shall file it in numerical order in the file and shall enter it alphabetically in the index. The entry shall show the name and last known business address of the employer named in the notice, the serial number of the notice, the date and hour of filing, and the amount of contribution, interest and penalty thereon due and unpaid. When a certificate of complete or partial release of such lien issued by the Director is presented for filing in the office of the recorder where a notice of lien was filed, the recorder shall permanently attach the certificate of release to the notice of lien and shall enter the certificate of release and the date in the Unemployment Compensation Contribution Lien Index on the line where the notice of lien is entered. In case title to land to be affected by the Notice of Lien is registered under the provisions of "An Act Concerning Land Titles", approved May 1, 1897, as amended, such notice shall be filed in the office of the Registrar of Titles of the county within which the property subject to the lien is situated and shall be entered upon the register of titles as a memorial or charge upon each folium of the register of title affected by such notice, and the Director shall not have a preference over the rights of any bona fide purchaser, mortgagee, judgment creditor or other lien holder arising prior to the registration of such notice.

C. The Director shall have the power to issue a certificate of partial release of any part of the property subject to the lien, upon the reimbursement of any recording fees paid by the Director with respect to the lien, if he shall find that the fair market value of that part of such property remaining subject to the lien is at least equal to the amount of all prior liens upon such property plus double the amount of the liability for contributions, interest and penalties thereon remaining unsatisfied.

D. Where the amount of or the liability for the payment of any contribution, interest or penalty is contested by any employing unit against whose property a lien has attached, and the determination of the Director with reference to such contribution has not become final, the Director may issue a certificate of release of lien upon the reimbursement of any recording fees paid by the Director with respect to the lien and the furnishing of bond by such employing unit in 125% the amount of the sum of such contribution, interest and penalty, for which lien is claimed, with good and sufficient surety to be approved by the Director conditioned upon the prompt payment of such contribution, together with interest and penalty thereon, by such employing unit to the Director immediately upon the decision of the Director in respect to the liability for such contribution, interest and penalty becoming final.

E. When a lien obtained pursuant to this Act has been satisfied and upon the reimbursement of any recording fees paid by the Director with respect to the lien, the Department shall issue a release to the person, or his agent, against whom the lien was obtained and such release shall contain in legible letters a statement as follows:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

BE FILED WITH THE RECORDER OR THE REGISTRAR

OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.

F. The Director may, by rule, require, as a condition of withdrawing, releasing, or partially releasing a lien recorded pursuant to this Section, that the employer reimburse the Department for any recording fees paid with respect to the lien.

(Source: P.A. 98-107, eff. 7-1-14.)

(820 ILCS 405/1704.1 rep.)

Section 95. The Unemployment Insurance Act is amended by repealing Section 1704.1.

Section 99. Effective date. This Act takes effect January 1, 2015.".