HB 1315-FN - AS INTRODUCED
2024 SESSION
24-2361
12/10
HOUSE BILL 1315-FN
AN ACT relative to the definition of wages for purposes of unemployment compensation.
SPONSORS: Rep. MacKenzie, Hills. 40
COMMITTEE: Labor, Industrial and Rehabilitative Services
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ANALYSIS
This bill clarifies in the determination of wages paid under unemployment compensation, the wages for sub-minimum wage earners and for tipped employees.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
24-2361
12/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
AN ACT relative to the definition of wages for purposes of unemployment compensation.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Unemployment Compensation; Wages. Amend RSA 282-A:15, I to read as follows:
I. "Wages" means every form of remuneration for personal services paid or payable to a person directly or indirectly by his employing unit, including salaries, commissions, bonuses, and the reasonable value of board, rent, housing, lodging, payment in kind and similar advantages estimated and determined in accordance with the rules of the commissioner of the department of employment security.
(a) Wages for sub-minimum wage earners shall be calculated based on what they would have earned if they were paid the prevailing minimum wage.
(b) In the case of a tipped employee, the wages shall be calculated based on the prevailing minimum wage or wages with tips whichever is greater.
2 Effective Date. This act shall take effect 60 days after its passage.
24-2361
11/29/23
HB 1315-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the definition of wages for purposes of unemployment compensation.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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Estimated State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | None
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Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | ||
Funding Source(s) | General Fund Various Government Funds | |||||
Appropriations | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None
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• Does this bill provide sufficient funding to cover estimated expenditures? [X] N/A • Does this bill authorize new positions to implement this bill? [X] No | ||||||
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Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
County Revenue | $0 | $0 | $0 | $0 | ||
County Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | ||
Local Revenue | $0 | $0 | $0 | $0 | ||
Local Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | ||
METHODOLOGY:
The Department of Employment Security indicates this bill would amend current RSA 282-A:15, I, by adding the following new paragraphs:
a) Wages for sub-minimum wage earners shall be calculated based on what they would have earned if they were paid the prevailing minimum wage, and
b) In the case of a tipped employee, the wages shall be calculated based on the prevailing minimum wage or wages with tips whichever is greater.
Regarding the first change, the Department states it appears the proposed new paragraph (a) would require State, county, and local government and for-profit business employers to report, for state unemployment tax purposes, what a sub-minimum wage earner “would have earned if they were paid the prevailing minimum wage.” Wages “paid or payable,” which are earned in covered employment, are required to be reported to the Department. This is information to assess the taxes to be paid by employers and employing units and to determine a claimant’s base period earnings. Under the proposed change, there could be a discrepancy between what the sub-minimum wage earner earned and what the employer must report to the Department for calculation of their unemployment tax rate and for calculation of a weekly benefit amount. Employers are required to report all wages paid to each employee during the quarter. The Department monitors this reporting through random audits of employers and direct audits of employers when there is a discrepancy between wages reported by the employer and wages claimed to have been earned by a worker filing for unemployment benefits. The proposed change is potentially in conflict with RSA 282-A:16, which considers an individual’s annual earnings to be wages, to the nearest dollar, earned during each base period from the employer. If the proposed language would require the employer to pay unemployment taxes on a higher amount than the wages actually earned by the claimant, this could conflict with Federal conformity requirements.
As described above, the proposed bill's insertion of paragraph (a) into RSA 282-A:15 could impact State, county, and local governments, and for-profit businesses who employ sub-minimum wage earners by an indeterminable amount. Services conducted for rehabilitation in a facility run by an exempt non-profit would not be impacted, and school-based work experience programs (SWEPs) at both nonprofit and public institutions would also be exempted. Only for-profit employers with SWEPs could be affected by paragraph (a) of the bill. Overall, the fiscal impact to State, county, and local government, and for-profit employers with sub-minimum wage earners would be difficult to calculate because the Department does not become aware of sub-minimum wage earners unless employers disclose this information.
Regarding the second change in proposed paragraph (b), the Department states this is already part of current New Hampshire law in RSA 279:21 which provides tipped employees are to be paid the federal minimum wage either by payment of a base rate with tips or, if there is a showing that this has not occurred, the Federal minimum wage must be paid. Therefore, there would be no instance where an employer filing a wage report would not be required to report at least the prevailing minimum wage or the wages paid including tips, if higher. Accordingly, the insertion of paragraph (b) would have no substantive or fiscal impact on current requirements.
The Department states it transmits legislative proposals to the US Department of Labor (USDOL) as a matter of regular course on all proposals seeking changes to the state’s unemployment compensation program. Once this bill is introduced, the Department will provide the language to the USDOL and request that they review it for purpose of conformity with federal requirements.
It is assumed that any fiscal impact would occur after FY 2024.
AGENCIES CONTACTED:
Department of Employment Security