PRESIDENT SIGNS LEGISLATION AIMING TO STOP SUTA-DUMPING
President Bush on Monday signed into law the SUTA Dumping Prevention Act of 2004 (P.L. 108-295). Enactment of the legislation (H.R. 3463) took less than one month from the time it bypassed the House Committee on Ways and Means and was swiftly approved by the full House under a suspension of the rules. The Senate approved the legislation by unanimous consent one week after it was received by the House. SUTA dumping occurs when an employer forms a new company and transfers some employees to the new company with lower tax rates for the purpose of avoiding unemployment taxes.
The new law amends Title III of the Social Security Act and conditions eligibility for federal unemployment insurance (UI) administrative grants on the inclusion of provisions in state UI laws that prevent the manipulation of unemployment experience through transfers or acquisitions of businesses. The law requires the Secretary of Labor to conduct a study to "assess the status and appropriateness of state actions to meet the requirements" of the new provisions and report to the Congress no later than July 15, 2007. The Secretary of Labor is to include in the report recommendations for Congressional action she considers necessary to improve the effectiveness of the law.
Additionally, the legislation amends Section 453 of the Social Security Act to provide state UI agencies with access to information from the National Directory of New Hires (NDNH) to assist in the quick detection of individuals who illegally collect UI benefits after returning to employment.
