§ 51–104. Payment of employer contributions.
(a) The contributions required by § 51-103, or payment in lieu of contributions under § 51-103(h), shall be paid to and collected by the Director, and shall, immediately upon collection, be deposited in the Clearing Account of the Fund. All moneys so required to be paid to and collected by the Director shall be subject to audit by the Office of the Inspector General.
(b)(1)(A) Not later than the last day of the following month after the close of each calendar quarter, or at such other time as the Director may by regulations prescribe, every employer shall make a return of, and shall pay the contributions which shall have accrued with respect to wages paid during such quarter with respect to employment, with the following exceptions:
(i) An employer with a household employee may make a return of and pay the contributions that have accrued with respect to the household employee on an annual basis on April 15th to the Department of Employment Services; and
(ii) As provided in § 51-103(h).
(B) The Director of Department of Employment Services shall prescribe such regulations as the director deems necessary to carry out the purpose of allowing household employer to convert from a quarterly system of payments and filing to annual filing.
(2) Employers who employ 250 employees or more in a calendar quarter shall file wage reports by magnetic tape or other machine readable method approved by the Director. Employers subject to this provision who fail to file wage reports using magnetic tape or other approved method shall be deemed to have failed to file a timely contribution report and shall be subject to the interest and penalty provisions of subsection (c) of this section until such time as the report is filed using magnetic tape or other approved method.
(c)(1) If the contributions or payments in lieu of contributions under § 51-103(h) are not paid when due, there shall be added thereto interest at the rate of 1 1/2 % per month or fraction thereof from the date they become due until paid. Interest shall not run against a court-appointed fiduciary when the contributions or payments in lieu of contributions under § 51-103(h) are not paid timely because of a court order.
(2) If contributions are not paid or wage reports are not filed on or before the first day of the second month following the close of the calendar quarters for which they are due or payments in lieu of contributions under § 51-103(h) are not made by that time, there shall be added a penalty of 10% of the amount due. The penalty shall not be less than $100 and for good cause the penalty may be waived by the Director of the Department of Employment Services.
(d) In the event of the death, dissolution, insolvency, receivership, bankruptcy, composition, or assignment for benefit of creditors of any employer, contributions, or payments in lieu of contributions under § 51-103(h), then or thereafter due from such employer under this section shall have priority over all other claims, except taxes due the United States or the District, and wages (not exceeding $600 with respect to any individual) due for services performed within the 3 months preceding such event.
(e) If any employer liable to pay the contribution, or payments in lieu of contributions under § 51-103(h), imposed by § 51-103 neglects and refuses to pay the same after demand, the amount (including any interest) shall be a lien upon all of the property and rights to property, whether real or personal, belonging to such person. Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the Director with the Recorder of Deeds of the District of Columbia. The Director may cause a civil action to be filed in the Superior Court of the District of Columbia to enforce the aforesaid lien by sale of any property or rights to property, whether real or personal, of the delinquent employer affected by said lien. All persons having liens upon or claiming any interest in the property or rights to property sought to be sold, as aforesaid, shall be made parties to the proceedings and brought into court. The Court shall proceed to adjudicate all matters involved therein and finally determine the merits of all claims to a lien upon the property and rights to the property in question, and in all cases where a claim or interest of the Director therein is established, may decree a sale of such property and rights of property by the proper officer of the Court, and any sale made pursuant to such proceedings shall be made subject to any and all valid liens existing against said property or rights to property, at the date of filing of the notice of lien. Such action shall be heard by the Court at the earliest possible date, and shall be entitled to preference on the calendar of the Court over all other civil actions except petitions for judicial review of this subchapter. In any suit to enforce a lien hereunder the owner of the property or rights of property affected by said lien may be allowed to file with the clerk of the Superior Court of the District of Columbia a written undertaking with 2 or more sureties to be approved by the Court, or with corporate surety approved by the Court, to the effect that he and they will pay the judgment that may be recovered and costs which judgment shall be rendered against all the persons so undertaking. Upon the approval of said undertaking the property or rights of property shall be released from such lien. No such undertaking shall be approved by the Court until the owner of the property or rights of property in question shall have given at least 2 days’ notice to the Director of his intention to apply to the Courts therefor. Each notice shall give the names and residences of the persons intended to be offered as sureties and the time when the motion for such approval will be made, and such sureties shall make oath if required that they are worth over and above all debts and liabilities double the amount of said lien. The Director may appear and object to such approval. When corporate surety is offered and the undertaking bears a certificate of the Clerk of the Superior Court of the District of Columbia that said corporation holds authority from the Secretary of the Treasury to do business in the District of Columbia and has a process agent therein, no notice shall be required. Such an undertaking as above mentioned may be offered before any suit is brought in order to discharge the property from such lien, in which case notice shall be given as aforesaid to the Director and the same proceedings shall be had as above directed in relation to the undertaking to be given after the commencement of the suit, except that when the surety is a corporation of the Clerk of said Superior Court of the District of Columbia that said corporation holds authority from the Secretary of the Treasury to do business in the District of Columbia, and has a process agent therein, no notice shall be required; and said undertaking shall be to the effect that the owner of said property or rights of property and his said sureties will pay any judgment that may be rendered in any suit that may thereafter be brought for the enforcement of said lien. If such undertaking be approved before any suit is brought, the surety or sureties may be made parties to such suit; if the undertaking be approved after suit is brought, the surety or sureties shall ipso facto become parties to the suit, and in either case the decree of the Court shall be against the surety or sureties as well as the owner. Subject to such regulations as the Council of the District of Columbia may prescribe, the Director shall issue a certificate of release of the lien if the Director finds that the liability for the amount of the contribution, or payments in lieu of contributions under § 51-103(h), imposed, together with all interest in respect thereof, has been satisfied or for any other reason deemed proper by the Director. Such lien shall continue to be valid for a period of 10 years from the date of filing of the notice thereof with the Recorder of Deeds of the District of Columbia, unless the same shall have been released of record, as hereinbefore provided. The foregoing remedy of the Director shall be cumulative and no action taken by the Director shall be or be construed to be an election on the part of the Director to pursue any remedy hereunder to the exclusion of any other remedy for which provision is made in this subchapter.
(f) Whenever any employing unit contracts with or has under it any contractor or subcontractor for any employment which is a part of its usual trade, occupation, profession, or business, said employing unit shall report to the Director, in accordance with applicable regulations, the name and address of each and every such contractor or subcontractor so employed. Unless such report is made the employing unit shall for all purposes of the chapter be deemed to employ each individual in the employ of each such contractor or subcontractor for each day during which such individual is engaged solely in performing such employment. Any employing unit who thus becomes liable for and pays contributions with respect to individuals in the employ of any such contractor or subcontractor, however, may recover same from such contractor or subcontractor.
(g) In payment of any contribution, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to $.01.
(h) If, after due notice, any employer defaults in any payment of contributions or interest thereon, the amount due may be collected by the Director or Director’s designated agent in the manner provided by law for the collection of taxes due the District on personal property in force at the time of such collection (including collection thereof by distraint), or by civil action in the name of the Director, and the employer adjudged in default shall pay the costs of such action. Civil actions brought under this section to collect contributions or interest or penalty thereon from an employer shall be heard by the Court at the earliest possible date and shall be entitled to preference upon the calendar of the Court over all other civil actions except petitions for judicial review of this subchapter. This subsection shall not be construed to mean that the Director shall be required to use only this means of collecting delinquent contributions but the Director may use any other legal method which the Director deems advisable.
(i) If, not later than 3 years after the date on which any contributions (or payments in lieu of contributions under § 51-103(h)) or interest thereon were paid, an employing unit which has paid such contributions (or payments in lieu of contributions under § 51-103(h)) or interest thereon shall make application for an adjustment thereof in connection with subsequent contribution with subsequent contribution payments (or payments in lieu of contributions under § 51-103(h)) or for a refund thereof because such adjustment cannot be made, and the Director shall determine that such contributions (or payments in lieu of contributions under § 51-103(h)) or interest on any portion thereof was erroneously collected, the Director shall allow such employing unit to make an adjustment thereof, without interest, in connection with subsequent contribution payments (or payments in lieu of contributions under § 51-103(h)) by it, or if such adjustment cannot be made the Director shall refund said amount, without interest, from the Clearing Account or Benefit Account upon checks issued by the Director or the Director’s duly authorized agent. For like cause and within the same period, adjustment or refund may be so made on the Director’s own initiative. Should benefits have been paid based upon work records filed by the employing unit, claiming an adjustment or refund, such benefit should be disregarded for purposes of figuring such adjustment or refund, and any such benefit payments already having been made at the time of the adjustment or refund, based upon records filed with this Director by such employing unit, shall to that extent be allowed and shall not be deemed to have been paid erroneously.
(j) The Director in the Director’s discretion, whenever the Director may deem it administratively advisable, may charge off of the Director’s books any unpaid account due the Director or any credit due an employer who has been out of business for a period of more than 3 years. Whenever an account is charged off by the Director, there shall be placed in the records of the Director a reason for such action.
(k) The Council of the District of Columbia, or the executive officer provided for under § 51-115(b), with the consent of the Council, may prescribe the extent, if any, to which any ruling, regulation, or decision relating to this subchapter shall be applied without retroactive effect.
(l)(1) The Director may compromise any civil case arising under this subchapter. Whenever a compromise is made by the Director in each such case, there shall be placed in the records of the Director the opinion of an attorney of the Director with the reasons therefor, including a statement of:
(A) The amount of the contributions, or payments in lieu of contributions under § 51-103(h), due;
(B) The amount of interest due on the same; and
(C) The amount actually paid in accordance with the terms of the compromise.
(2) There is hereby established in the Treasury of the United States a special escrow account into which the Director shall deposit all funds received in connection with an offer of compromise. Such funds shall be kept in such escrow account until final action is had upon the offer of compromise and shall not be subject to offset for any indebtedness whatsoever. In the event the compromise is approved, the funds shall be transferred to the District Unemployed Compensation Funds. In the event the compromise is disapproved, the funds shall be immediately returned to the individual who made the offer of compromise.
(m)(1) If any employer liable to pay contributions or payments in lieu of contributions under § 51-103(h) files a wage report for the purposes of determining the amount of contributions due under this subchapter but fails to pay contributions, interest, or penalties, the Director may assess the amount of contributions, interest, or penalties due on the basis of the information submitted and shall give written notice of such assessment to the employer. In the event such report is subsequently found to be incorrect additional assessments may be made, notwithstanding paragraph (4) of this subsection.
(2) If an employer liable to pay contributions, or payments in lieu of contributions under § 51-103(h), fails to file, on or before the prescribed date, a wage report for purposes of determining the amount of contributions due under this subchapter or if such wage report when filed is deemed by the Director to be incorrect or insufficient, then the employer shall file a correct and sufficient report within 10 days after the Director requires same by written notice, and upon failure to do so, the Director shall assess the amount of contributions, interest, penalties due from such employer on the basis of such information as the Director may be able to obtain, and shall give written notice of such assessment to the employer.
(3) If the Director believes that the collection of any contribution, payment in lieu of contribution, interest, or penalty under the provisions of this subchapter will be jeopardized by delay, the Director may, whether or not the time prescribed in this subchapter for the filing of reports or the payment of contributions has expired, immediately assess such contributions, payment in lieu of contributions, interest, or penalty and shall give written notice of such assessment to the employer.
(4) Assessments made pursuant to this subsection shall be final and irrevocably fix the amount of contributions, interest, or penalties due and payable unless the employer shall file an appeal to the Director, pursuant to duly prescribed regulations, within 15 days of the mailing of such determination or the Director on the Director’s own motion reduces the amount of the assessment; provided, however, that any employer appealing an assessment shall first pay such contributions, interest and penalties. After a hearing, the appeal tribunal shall enter a decision affirming, modifying, or setting aside the assessment and shall promptly give the employer written notice of its decision.
(n) The contributions, payments in lieu of contributions, interest, and penalties thereon required by this subchapter shall become, from the time due and payable, a personal debt of the person liable to pay the same to the Director. For purposes of this subchapter, the term “person” shall include any officer of a corporation having 35 or fewer shareholders, any employee of such corporation responsible for the payment of contributions, interest, and penalties, and any member of a partnership or association responsible for the payment of contributions, payments in lieu of contributions, interest, and penalties, and any member of a partnership or association responsible for the payment of contributions, payments in lieu of contributions, interest, and penalties.
(o) In addition to all other methods granted to the Director to effect the collection of delinquent contributions payment in lieu of contributions, interest, and penalties, the Director shall have the authority to seek the suspension or cancellation of any business, professional, alcoholic beverage, occupancy, or other license held by any employer subject to this subchapter.
(p)(1) For purposes of this subsection, the term:
(A) “Knowingly” means having actual knowledge of or acting with deliberate ignorance or reckless disregard of the prohibitions under this subsection.
(B) “Person” means an individual, a trust, estate, partnership, association, company, or corporation.
(C) “Trade or business” includes the employer’s workforce.
(D) “Violates or attempts to violate” includes acts evidencing an intent to evade, misrepresentation, or willful nondisclosure of material information.
(2) Any person that knowingly violates or attempts to violate any provision of this subchapter related to the calculation, determination, or assignment of contribution rates, or knowingly advises another person in a way that results in a violation of any of those provisions, shall be subject to the following penalties:
(A) If the person is an employer subject to this subchapter, the highest rate shall be assigned for the duration of the rate year in which the violation or attempted violation occurred and for the following 3 consecutive years; provided, that if the employer is already subject to the highest rate for the year that the violation or attempted violation occurred or if the increased rate would be less than 2% for that year, an additional 2% of taxable wages shall be imposed for that year and for the following 3 consecutive years.
(B) If the person is not an employer subject to this subchapter, a fine shall be imposed in the amount of $5,000 for the 1st violation and in an amount not to exceed $25,000 for each additional violation. Fines shall be enforced by civil action brought by the Director and shall be deposited in the Special Administrative Expense Fund established by § 51-114(b).
(3) Any violation of this subsection may also be prosecuted on information brought by the Attorney General for the District of Columbia in the Superior Court. Any person that is convicted shall be guilty of a misdemeanor and shall be subject to a fine not to exceed $5,000, imprisoned not more than 180 days, or both, and shall be liable for costs of prosecution.
(4) This subsection shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the Secretary of Labor.