Ga. Comp. R. & Regs. R. 300-2-3-.17 - Successorship

Current through Rules and Regulations filed through April 4, 2022

Any legal entity who acquires by purchase, merger, consolidation or other means substantially all of the trade, business or assets of any employer and continues such business shall be deemed a successor to the employer from whom the business was acquired, subject to the mandatory and prohibited successorship provisions in subsections (g) and (h) of O.C.G.A. Section 34-8-153. Pursuant to Section 303(k) of the federal Social Security Act, as amended by the SUTA-Dumping Prevention Act of 2004 (P.L. 108-295), the requirements of mandatory and prohibited transfers of unemployment experience rates of contribution stated therein shall be applicable effective January 1, 2006 to all transfers of experience on or after that date. Factors to be considered by the Commissioner in making a determination of whether a successorship has occurred and whether successorship treatment is required or prohibited include, but are not limited to, the following:

(a) When successorship is not otherwise required or prohibited, a rebuttable presumption of successorship shall arise if 90% or more of the predecessor's trade, business or assets were transferred;
(b) Continuity of workforce;
(c) Continuity of the predecessor's business enterprise;
1. Whether the same facility is used;
2. Whether the same customers are used;
3. Whether the business services the same geographic area;
4. Whether the same trade or business enterprise is continued;
5. Whether there are any significant changes in management and supervision of employees;
(d) Continuity of bargaining unit, if any; if there is a bargaining unit, did the acquirer:
1. Expressly assume the bargaining unit?
2. Expressly reject the bargaining unit?
3. Make any change in the craft designations?
4. Continue to use the same hiring hall?
5. Hire new employees such that the bargaining unit no longer represents a majority of the workers?
(e) Whether there occurred a hiatus in the business activities. The length of the hiatus shall be considered by the Commissioner.
1. When successorship is not otherwise required or prohibited, there shall be a rebuttable presumption in favor of successorship if the hiatus is less than two (2) weeks.
2. When successorship is not otherwise required or prohibited, there shall be a rebuttable presumption against successorship if the hiatus is two (2) weeks or more.
(f) Whether the employees of the predecessor had reason to believe that employment would continue.
(g) Substantially common ownership, management, or control over the trade or business acquired;
1. Whether there are any significant changes in ownership of the predecessor and the successor before, during or after the acquisition;
2. Whether the predecessor and the successor are owned by any of the same individual(s), any of the same legal entities, or any of the same legal entities which are owned by any of the same individual(s);
3. Whether any of the owners of the predecessor and the successor have familial or financial relationships without regard to the acquisition;
4. Whether there are any significant changes in the management and supervision of employees before and after the acquisition;
5. Whether any officer, major stockholder, or other person having charge of the affairs of the predecessor, or of the successor, has meaningful authority, directly or indirectly, by contract or in fact, regarding the affairs of the other;
6. Whether capital investments in the predecessor and the successor were supplied by any of the same individual(s) or legal entities;
7. Whether the operational financing of the predecessor and the successor are controlled or directed by any of the same individual(s) or legal entities.
(h) Whether or not the successor acquired the trade, business or assets of the predecessor solely or primarily for the purpose of obtaining a lower rate of unemployment tax contributions;
1. Whether the predecessor's business enterprise was active at the time of the acquisition;
2. The cost of acquiring the predecessor's trade or business;
3. Whether the cost of acquiring the predecessor was reasonably related to the market value of the predecessor's trade or business;
4. Whether the successor actually continued the business enterprise of the predecessor;
5. How long the successor continued the business enterprise activity of the predecessor;
6. Whether a substantial number of new employees were hired by the successor for performance of duties unrelated to the business enterprise activity conducted by the predecessor before the acquisition;
7. The potential unemployment insurance tax savings in contributions costs which favorable successorship treatment might achieve compared to the cost of the acquiring the predecessor's trade or business.

Notes

Ga. Comp. R. & Regs. R. 300-2-3-.17
O.C.G.A. Secs. 34-8-70, 34-8-153, 34-8-157, 42 U.S.C. 503(k), SUTA-Dumping Prevention Act of 2004 (P.L. 108-295).
Original Rule entitled "Successorship" adopted. F. June 25, 1998; eff. July 15, 1998. Amended: F. Dec. 9, 2005; eff. Jan. 1, 2006, as specified by the Agency.

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