11-10-717. Collection — Failure to pay or report — Penalty — Definition.

11-10-717. Collection — Failure to pay or report — Penalty — Definition. (a)(1)(A) If, after due notice, any employer defaults in any payment of contributions or interest thereon, the amount due may be collected by civil action in the name of the Director of the Division of Workforce Services. (B) The employer adjudged in default shall pay the costs of the action, including reasonable attorney's fees for prosecution of the action. (2) Civil actions brought under §§ 11-10-716 — 11-10-723 to collect contributions or interest from an employer shall be heard by the court at the earliest possible date and shall be entitled to preference upon the calendar of the court over all other civil actions except petitions for judicial review under this chapter and cases arising under the Workers' Compensation Law, § 11-9-101 et seq. (3)(A) The courts of this state shall, in like manner, entertain actions to collect contributions or interest for which liability has accrued under the unemployment compensation law of any other state or of the United States Government. (B) No suit, including an action for a declaratory judgment, shall be maintained and no writ or process shall be issued by any court of this state that has the purpose or effect of restraining, delaying, or forestalling the collection of any contributions under this chapter or substituting any collection procedure for those prescribed in this chapter. (4) If, after due notice, a person defaults in payment of contributions, the federal income tax refund of the person is subject to interception under the Claims Resolution Act of 2010, Pub. L. No. 111-291, or a regulation adopted to implement that law. (b)(1) There may be assessed by the director against employers who do not file their reports in the time prescribed by the director a penalty of ten dollars ($10.00) or five percent (5%) of the contributions due on the report, whichever is the greater, if the report is filed within twenty (20) days after its due date. (2) A penalty of twenty dollars ($20.00) or ten percent (10%) of the contributions due on the report, whichever is the greater, may be assessed on reports filed in excess of twenty (20) days after their due date. (3) A penalty of thirty dollars ($30.00) or fifteen percent (15%) of the contributions due on the report, whichever is the greater, shall be assessed when: (A) The employer has failed to supply all information, including, but not limited to, employee wage information, employee Social Security number, and a separate accounting of seasonal worker wages within and without the normal seasonal period of operations, directed by rules prescribed by the director; (B) The director deems it necessary to estimate wage information; (C) A subpoena must be used to obtain wage information; or (D) The employer files a timely quarterly wage report reflecting no wages were paid but then subsequently files an amended quarterly wage report that: (i) Reflects the required employee information, including without limitation the employee wage information and the employee Social Security number; and (ii) Is filed more than twenty (20) days after its due date. (c)(1)(A) The courts of this state shall recognize and enforce liability for unemployment contributions, penalties, interest, benefit overpayments, court costs, and reasonable attorney's fees imposed by other states that extend a like comity to this state. (B) The director is empowered to effect collection of unemployment contributions, penalties, interest, benefit overpayments, court costs, and reasonable attorney's fees due the Division of Workforce Services in any jurisdiction that extends such comity. (C) In no instance shall this state or any other state exceed the collection procedures as provided by the laws of the state in which collections are effected. (2) In any case, the director may, as agent for and on behalf of any other state, institute and conduct legal action to collect contributions, penalties, interest, benefit overpayments, court costs, and reasonable attorney's fees under a foreign judgment for states that extend comity to this state. (3)(A) A certificate by the requesting state attesting the authority of the official to collect contributions, penalties, interest, benefit overpayments, court costs, and reasonable attorney's fees shall be conclusive evidence of the authority. (B) The requesting state shall pay all court and related costs incurred. (d) Notwithstanding any other provisions of this chapter, any employer or any individual, organization, partnership, corporation, or other legal entity engaging, in any way, in contract construction activity and subcontracting out any part of that activity shall be liable for any unpaid contributions, interest, and penalties due from the subcontracting employer to the extent that the contributions, interest, and penalties accrue and are attributable to that part of his, her, or its work subcontracted to the subcontracting employer. (e)(1)(A) Notwithstanding any other provisions of this chapter, any employer or any individual, organization, partnership, corporation, or other legal entity that meets the definition of “lessor employing unit” as set forth in subdivision (e)(4) of this section shall be liable for contributions on wages paid by the lessor employing unit to individuals performing services for client lessees of the lessor employing unit. (B) Unless the lessor employing unit has timely complied with the provisions of subdivision (e)(2) of this section, any employer, individual, organization, partnership, corporation, or other legal entity leasing employees from any lessor employing unit shall be jointly and severally liable for any unpaid contributions, interest, and penalties due under this chapter from any lessor employing unit attributable to wages for services performed for the client lessee entity by employees leased to the client lessee entity. (C) Beginning on or after January 1, 1998, the lessor employer shall keep separate records and submit separate quarterly contribution and wage reports for each of its client lessee entities using the client lessee's account number and unemployment contribution rate. (2)(A)(i)(a) In order to relieve client lessees from joint and several liability and the separate reporting requirements imposed under subdivision (e)(1) of this section, any lessor employing unit as defined in subdivision (e)(4) of this section may post and maintain a surety bond issued by a corporate surety authorized to do business in Arkansas in the amount of one hundred thousand dollars ($100,000) to ensure prompt payment of contributions, interest, and penalties for which the lessor employing unit may be or becomes liable under this chapter. (b) For the period beginning on or after January 1, 1998, through June 30, 2005, a bonded lessor employing unit shall report all clients' wages on the lessor employing unit's quarterly contribution and wage report using its contribution rate, account number, and federal identification number. (c)(1) Quarterly contribution and wage reports for all clients obtained by bonded lessor employing units on or after July 1, 2005, shall be reported in accordance with subdivision (e)(1)(C) of this section for three (3) consecutive years. (2) After reporting client wages for three (3) consecutive years as required by subdivision (e)(2)(A)(i)(c )(1 ) of this section, a bonded lessor employing unit shall report client wages on the lessor employing unit's quarterly contribution and wage report using the lessor employing unit's contribution rate, account number, and federal identification number. (ii) If after three (3) years, throughout which the lessor employing unit as defined in subdivision (e)(4) of this section has paid all contributions due in a timely manner, the bond shall be reduced to thirty-five thousand dollars ($35,000) and shall remain at thirty-five thousand dollars ($35,000) so long as the lessor employing unit continues to report and pay all contributions due in a timely manner. (iii) The employee leasing company is prohibited from moving the wages of a client from one (1) leasing company account to another leasing company account with a lower rate. (B) In lieu of a surety bond, the lessor employing unit may deposit in a depository designated by the director securities with marketable value equivalent to the amount required for a surety bond. The securities so deposited shall include authorization to the director to sell any such securities in an amount sufficient to pay any contributions which the lessor employing unit fails to promptly pay when due. (3) Lessor employing units not currently engaged in the business of leasing employees to client lessees shall comply with subdivision (e)(2) of this section before entering into lease agreements with client lessees. (4) The term “lessor employing unit” is defined as an independently established business entity that engages in the business of providing leased employees to any other employer, individual, organization, partnership, corporation, or other legal entity, referred to herein as a client lessee. Any legal entity determined to be engaged in the business of outsourcing shall be considered a “lessor employing unit” under this section. Additionally, the licensing requirements of the Arkansas Professional Employer Organization Recognition and Licensing Act, § 23-92-401 et seq., as administered by the State Insurance Department must be satisfied. (5) The provisions of this subsection shall not be applicable to private employment agencies who provide their employees to employers on a temporary help basis, provided that the private employment agencies are liable as employers for the payment of contributions on wages paid to temporary workers so employed.