Iowa Admin. Code r. 871-23.28
Current through Register Vol. 47, No. 11, December 11, 2024
Rule 871-23.28 - Successor(1) Definition of "successor employer" as used in Iowa Code section 96.7 and these rules means an employing unit which:a. Acquired the organization, trade or business, or substantially all the assets of an employing unit that was subject to the provisions of chapter 96 prior to the acquisition, regardless of whether the acquirer was an employing unit prior to the acquisition. The acquiring employer must continue to operate the enterprise or business.b. An employing unit that acquired a severable portion of the business of an employer who is subject to chapter 96 providing:(1) The portion of the business or enterprise acquired would have in itself met the requirements of section 96.19(16) "a."(2) An application is made for a transfer of the records of the severable portion transferred within 90 days from the date of transfer.(3) The transfer of records meets the approval of the predecessor and department and adequate information is furnished to meet the requirements.c. Rescinded IAB 5/14/03, effective 6/18/03.(2) An "organization," "trade" or "business" as used in Iowa Code section 96.19(16) "b" is acquired if an employing unit acquires factors of an employer's organization, trade or business sufficient to constitute an entire existing going business unit as distinguished from the acquisition of merely assets from which a new business may be built. The question of whether an organization, trade or business is acquired is determined from all the factors of the particular case. Among the factors to be considered are: a. The place of business.b. The staff of employees.g. The tools and fixtures.(3) Substantially all of the assets as used in Iowa Code section 96.19(16) "b" are acquired if an employing unit acquires substantially all of the assets of any employer which generate substantially all of the employment, except those retained incident to the liquidation of obligations.(4) A segregable and identifiable part of enterprise as used in Iowa Code section 96.7(3) "b " is acquired if an employing unit acquires factors of any employer's organization, trade or business sufficient to constitute an existing separable going business unit as distinguished from the acquisition of merely assets from which a new business may be built. The part of the business acquired, if considered separately, would have been liable under section 96.19(16) "a." The question of whether a distinct and severable portion is acquired is determined from all of the factors of the particular case. Among the factors to be considered are:a. The place of business.b. The staff of employees.g. The accounts receivable.h. The tools and fixtures.(5)"Successor liability" as used in Iowa Code chapter 96, and these rules, occurs for the acquiring employing unit when there is a transfer of the predecessor's assets or other physical components necessary to continue the operation of the enterprise or business to the successor employer and the successor employing unit must continue to operate the business to the same basic extent as if there had been no change in the ownership or control of the business or enterprise.(6) Successor liability will be found to occur. If an enterprise or business is leased to a covered employer and any party or entity purchases or assumes the covered employer's lease, or any party or entity acquires anew lease and substantially all of the assets of the covered employer, and the new lessee continues the operation of the enterprise or business to the same basic extent as though there had been no change in the ownership or control of the enterprise or business, such party or entity acquires the covered employer's experience.(7) The department will utilize the following general criteria when establishing successorship in specialized cases: a. Where a covered employing unit is operating an enterprise or business under a lease agreement and it is terminated, there will be no transfer of the covered employing unit's experience unless the lessor takes over and continues to operate the enterprise or business in which case the lessor will be considered the successor to the covered employer's experience.b. Where an enterprise or business is leased to a covered employing unit, and the lease agreement has terminated with the lessor acquiring a new lessee, the new lessee is not considered to be a successor to the experience of the predecessor lessee unless the new lessee acquires substantially all of the assets of the predecessor lessee and the new lessee continues the operation of the enterprise or business to the same basic extent as though there had been no change in the ownership or control of the enterprise or business.c. A franchise agreement will be treated the same as lease agreement.d. If the bankruptcy court closes an enterprise or business, the court becomes the agent for the bankrupt employer. (1) Where the court closes the enterprise or business and starts liquidating procedures, the employer's account is placed in an inactive status subject to termination and no successorship or transfer of the employer's experience is involved, or(2) If the court appoints a trustee or receiver to continue the operation of the enterprise or business, the account address will be corrected to include the name of the trustee or receiver for mailing purposes. If the trustee or receiver obtains a new federal identification number for this business, a new account number will be established for the trustee or receiver as a successor to the original enterprise or business. If the trustee or receiver sells the enterprise or business as a going enterprise, the new owner will be a successor to the predecessor's experience.e. If a covered employer is forced out of business through foreclosure proceedings there will be no transfer of the employer's experience unless the mortgagee takes over the operation of the business or enterprise and continues it to the same basic extent as though there had been no basic change in the ownership control. This rule is intended to implement Iowa Code sections 96.7(3) "b,"96.8 and 96.19(16)"b."
Iowa Admin. Code r. 871-23.28