Notwithstanding any other provision of law, the following shall apply regarding transfers of experience and assignment of rates: (1) If an employer transfers its trade or business, or a portion thereof, to another employer and, at the time of the transfer, there is any common ownership, management or control of the employers, then the unemployment experience attributable to the transferred trade or business shall be transferred to the employer to whom such business is so transferred. The rates of both employers shall be recalculated and made effective immediately upon the date of the transfer of trade or business. (2) Whenever a person who is not an employer under this chapter at the time it acquires the trade or business of an employer, the unemployment experience of the acquired business shall not be transferred to such person if the Department finds that such person acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead, such person shall be assigned the applicable new employer rate under § 3348 of this title. In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the Department shall use objective factors which may include the cost of acquiring the business, whether the person continued the business enterprise of the acquired business, how long such business enterprise was continued, or whether new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition. (3) a. If a person knowingly violates or attempts to violate paragraphs (1) or (2) of this section or any other provision of this chapter related to determining the assignment of a contribution rate, or if a person knowingly advises another person in a way that results in a violation of such provision, the person shall be subject to the following penalties: 1. If the person is an employer, then such employer shall be assigned the highest rate assignable under this chapter for the rate year during which such violation or attempted violation occurred and the 3 rate years immediately following this rate year. However, if the person's business is already at such highest rate for any year, or if the amount of increase in the person's rate would be less than 2% for such year, then a penalty rate of contributions of 2% of taxable wages shall be imposed for such year. 2. If the person is not an employer, such person shall be subject to a civil monetary penalty of not more than $5,000. Any such penalty shall be deposited in the penalty and interest account established under § 3166 of this title. b. For purposes of this section, the term "knowingly" means having actual knowledge of, or acting with deliberate ignorance or reckless disregard for, the prohibition involved. c. For purposes of this section, the term "violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation or wilful nondisclosure. d. In addition to the penalty imposed by paragraph (3)a. of this section, any violation of this section may be prosecuted as a class B misdemeanor under § 4202(a)(2) of Title 11. (4) The Department shall establish procedures to identify the transfer or acquisition of a business for purposes of this section. (5) For purposes of this section: a. "Person" has the meaning given such term by § 7701(a)(1) of the Internal Revenue Code of 1986 [26 U.S.C. § 7701(a)(1)], and b. "Trade or business" shall include the employer's workforce. (6) This section shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.
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