2015 ORS 657.480¹
Effect of transfer of trade or business
  • partial transfer
  • penalties
  • rules

(1) If an employer transfers its trade or business or a portion of its trade or business to another employer, the portion of unemployment experience attributable to the transferred trade or business shall be transferred to the acquiring employer.

(2)(a) If a person is not an employer when the person acquires a trade or business or a portion of a trade or business of an employer, the unemployment experience of the acquired trade or business shall be transferred to the person unless the Director of the Employment Department finds that the person acquired the trade or business solely or primarily for the purpose of obtaining a lower tax rate.

(b) The person described in paragraph (a) of this subsection is not entitled to a tax rate of less than the tax rate assigned under ORS 657.435 (Base rate for first year) unless and until the person, based upon the persons unemployment experience and the unemployment experience of the trade or business transferred, has throughout the 12 consecutive months preceding the computation date had its account chargeable with benefits.

(c) If the director finds that a person acquired a trade or business solely or primarily for the purpose of obtaining a lower tax rate, the director shall deny a transfer of unemployment experience. In determining whether a person acquired a trade or business solely or primarily for the purpose of obtaining a lower tax rate, the director shall use objective factors that may include:

(A) The cost of acquiring the trade or business;

(B) Whether the person continued the business activities of the transferred trade or business;

(C) How long the person continued the business activities of the transferred trade or business; or

(D) Whether a substantial number of new employees were hired for the performance of duties unrelated to the business activities of the trade or business that were conducted before the transfer.

(3)(a) A person may not engage in activity to transfer or acquire, or to attempt to transfer or acquire, a trade or business or any portion of a trade or business solely or primarily for the purpose of obtaining a lower tax rate. If a person knowingly engages in activity to transfer or acquire, or to attempt to transfer or acquire, a trade or business or any portion of a trade or business solely or primarily for the purpose of obtaining a lower tax rate, the director shall assign the person the highest tax rate designated under this chapter for the rate year during which the activity occurred and for the next three rate years. However, if the person is already subject to the highest tax rate for a year, or if the amount of increase in the persons tax rate would be less than two percentage points for the year, the director shall impose an additional penalty tax rate of two percentage points added to the calculated tax rate.

(b) A person may not advise another person to engage in activity to transfer or acquire, or to attempt to transfer or acquire, a trade or business or any portion of a trade or business solely or primarily for the purpose of obtaining a lower tax rate. In addition to any other penalty provided by law, the director may assess a civil penalty not to exceed $10,000 against a person that knowingly advises another person to engage in activity to transfer or acquire, or to attempt to transfer or acquire, a trade or business or any portion of a trade or business solely or primarily for the purpose of obtaining a lower tax rate. The director shall deposit all sums collected as civil penalties under this paragraph into the Employment Department Special Administrative Fund. An assessment under this paragraph is final unless within 20 days after the mailing of the notice of assessment the person files an application for a hearing under ORS 657.683 (Hearings on actions under ORS 657.480, 657.679, 657.681 and 657.682).

(c) As used in this subsection, knowingly means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the law.

(4) The director shall adopt necessary rules and procedures regarding the transfer of unemployment experience for purposes of establishing employer tax rates under this chapter to ensure that higher tax rates are not avoided through the transfer or acquisition of a trade or business or a portion of a trade or business. In adopting rules under this section, the director shall consider and strive to meet the minimum requirements in any guidance or regulations issued by the United States Department of Labor. [Amended by 1977 c.538 §6; 1999 c.513 §1; 2005 c.35 §2]

Notes of Decisions

Employ­ment Division is not precluded by res judicata from reexamining its original determina­tion that employer is successor-in-interest to a prior employer, under ORS 657.676 (Reconsideration of determinations), if reconsidera­tion is restricted to clerical or computa­tional errors. Jefferson Street Holding Co. v. Employ­ment Div., 42 Or App 427, 600 P2d 928 (1979)

Where original employer conceded in Court of Appeals that it was not relieved of liability for payroll tax deficiencies by transfer to successor employer though referee concluded liability passed to successor employer, only remaining fact ques­tion was date on which business was transferred. Employ­ment Div. v. Brown, 57 Or App 642, 646 P2d 73 (1982)

Referee properly held that withdrawal of partner from law partnership and assump­tion of business by remaining partners is a transfer within meaning of this sec­tion so as to subject new entity to reevalua­tion of its experience rating because business was formerly con­ducted by one employing entity is now con­ducted by two separate entities. Joseph, Baberer & Carpenter v. Emp. Div., 85 Or App 606, 737 P2d 628 (1987), Sup Ct review denied

Chapter 657

Notes of Decisions

An individual who performs services for remunera­tion is an employee, and per­son or organiza­tion for whom services are performed is an employer under terms of Employ­ment Division Law even if remunera­tion is paid indirectly rather than directly unless employer shows that some statutory exclusion applies. Lectro Lift, Inc. v. Morgan, 14 Or App 316, 513 P2d 526 (1973)

Mere act of incorporating as professional corpora­tion does not, by itself, create employer-employee rela­tionship for purposes of this chapter. Peterson v. Employ­ment Division, 82 Or App 371, 728 P2d 95 (1986)

Determina­tion of whether claimant is qualified for benefits is made by reference to ORS 657.150 (Amount of benefits) and 657.155 (Benefit eligibility conditions), which require determina­tion of amount of work that claimant performed in employ­ment as defined in ORS chapter 657, which, in turn means that exclusions from employ­ment set out in ORS 657.040 (Employment) through 657.094 (Employment) must be considered. May Trucking Co. v. Employ­ment Dept., 251 Or App 555, 284 P3d 553 (2012)

Atty. Gen. Opinions

Determining employer of musicians group, (1972) Vol 35, p 1306


1 Legislative Counsel Committee, CHAPTER 657—Unemployment Insurance, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors657.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 657, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano657.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.