Section 421.601. Newly liable nonprofit employer electing reimbursement payments; security.

(1) A newly liable nonprofit employer that elects, on and after December 21, 1989,  to   make  reimbursement   payments  pursuant  to   the provisions of section 13a of Act No. 1 of the Public Acts of the Extra Session of 1936, as amended, being S421.13a of the Michigan Compiled Laws, shall provide the required security for the first-year security  that  is required pursuant to the provisions of section 13a(4) of Act No. 1  of  the Public Acts of the Extra Session of 1936, as amended,  being  S421.13a(4) of the Michigan Compiled Laws, and for the 2 consecutive succeeding calendar years. Thereafter, the security shall be renewed for 2-year periods for as long as the nonprofit   organization  retains  reimbursement  status.   A nonprofit employer that seeks to renew a security and thereby retain reimbursement status shall do so by November 30 of the   year   before   the year for which the security is required.

(2)   The security shall be in the form of a surety  bond,  irrevocable letter of credit, or other banking device which is acceptable to the employment security commission and which provides for payment to the commission, on demand, of an amount equal to the security required to be posted. The required security may be posted by a third-party guarantor.

(3)  This rule shall not apply to a newly liable nonprofit employer that is expected to pay less than $100,000.00 or less in total wages per calendar year. However, a nonprofit employer that elects reimbursement status on or after December 21, 1989, shall be required to provide security when payment of gross wages in a calendar year reaches exceeds $100,000.00. It is  the employer's duty to notify the commission, within 60 days, that its payroll has reached exceeds $100,000.00 per year.  The security shall be posted within 30 days of notice of such requirement by the commission.

(4)   For newly liable employers, the amount of security that is required shall be 4.0% of the employer's estimated total annual wage payments, as determined by the commission.   Employers  that  have    a   previous    payroll history shall be required to file a security that is equal to 4.0% of the total annual wage payments for the 12-month period ended June  30   of  the year before the year the security is required or  4.0%  of the   estimated total annual wage payments, whichever is greater.

History: 1992 AACS.