NOTICE OF SUBSTANTIVE CHANGE
TYPE OF FILING: Amendment
1. Agency Information
Workforce Services, Unemployment Insurance
Salt Lake City, UT 84145-0244
2. Contact Persons
Please address questions regarding information on this notice to the persons listed above.
3. General Information
A. Rule or section catchline:
R994-305. Collection of Contributions
B. Purpose of the new rule or reason for the change:
During the 2026 General Session, the Legislature passed HB 396, Public Project Subcontractor Amendments, which clarified enforcement authority and penalty structures related to unemployment insurance reporting, collections, liens, and warrants.
This change amends this rule to conform with the new legislation.
C. Summary of the new rule or change:
This rule change establishes interest and penalties for an employer's failure to file a contribution report or pay a contribution as required by the Employment Security Act (Act).
The contribution penalties and interest established in this rule change are currently the same as those previously set by the Act.
The change also establishes the penalties for an employer's misclassification of an employee as an independent contractor or other non-employee, identifies circumstances under which the employer's misclassification will be reported to the United States Department of Labor, and identifies how penalty funds will be used.
Finally, this amendment makes changes for clarification and conformity with the Rulewriting Manual for Utah.
4. Legislative Action Information
A. Are any changes in this filing because of state legislative action?
Changes are because of legislative action.
B. If yes, any bill number and session:
HB 396 (2026 General Session)
5. Fiscal Information
Provide an estimate and written explanation of the aggregate anticipated cost or savings to:
This rule change is not expected to have any fiscal impact on state government revenues or expenditures beyond any impact addressed in the fiscal note of HB 396 (2026), which provides that the legislative action is not likely to materially impact state revenue or expenditures.
There are no additional state employees or resources needed to oversee this rule change.
This rule change will not increase the Department of Workforce Services' (Department) workload and can be carried out with existing budget.
This rule change is not expected to have any fiscal impact on local governments' revenues or expenditures beyond any impact addressed in the fiscal note of HB 396 (2026).
Local governments do not administer the Act and this rule change requires no action or expenditure by local governments.
C. Small businesses ("small business" means a business employing 1-49 persons):
This rule change is not expected to have any fiscal impact on small businesses' revenues or expenditures beyond any impact addressed in the fiscal note of HB 396 (2026).
This rule change requires no action or expenditure by small businesses.
A small business employer would be required to pay a penalty or interest only if it violates the provisions of the Act and associated administrative rules.
D. Non-small businesses ("non-small business" means a business employing 50 or more persons):
This rule change is not expected to have any fiscal impact on non-small businesses' revenues or expenditures beyond any impact addressed in the fiscal note of HB 396 (2026).
This rule change requires no action or expenditure by non-small businesses.
A non-small business employer would be required to pay a penalty or interest only if it violates the provisions of the Act and associated administrative rules.
E. Persons other than small businesses, non-small businesses, state, or local government entities ("person" means any individual, partnership, corporation, association, governmental entity, or public or private organization of any character other than an agency):
This rule change is not expected to have any fiscal impact on other persons beyond any impact addressed in the fiscal note of HB 396 (2026).
This rule change requires no action or expenditure by other persons.
An employer in this category would be required to pay a penalty or interest only if it violates the provisions of the Act and associated administrative rules.
F. Compliance costs for affected persons:
There are no compliance costs associated with this change.
No new fees are associated with this change.
6. Regulatory Impact Summary Table
Enter the cost or savings in the relevant cell. If there is no cost or savings, enter, "$0." If a cost or savings is inestimable, enter, "inestimable."
7. Regulatory Impact Analysis Approval
The Commissioner of the Department, Casey Cameron, has reviewed and approved this regulatory impact analysis.
8. Family Impact Information
A. The agency has considered this rule's impact on family health, stability, and formation:
9. Citation Information
Provide citations to the statutory authority for the rule. If there is also a federal requirement for the rule, provide a citation to that requirement:
11. Public Notice Information
The public may submit written or oral comments to the agency identified in box 1.
A. Comments will be accepted until:
12. Effective Date Information
This rule change MAY become effective on:
(NOTE: This is the date the agency anticipates making the filing effective. It is NOT the effective date)
13. Agency Authorization Information
Agency head or
designee and title:
Casey Cameron, Commissioner
R994. Workforce Services, Unemployment Insurance.
R994-305. Collection of Contributions.
R994-305-101. [Policy Governing the Filing of ]Warrants. (1) [Warrants]A warrant will be issued on a fault overpayment[s] [and]or delinquent employer account[s] if[when]: (a) [there is ]no installment agreement is in effect[,]; (b) [when] the installment agreement provides for more than three years from the date the liability is established to pay the liability[,]; (c) [when] the monthly installment payment amount on a fault overpayment is less than the amount specified in Subsection R994-406-302(4)(b)[,]; or (d) [when an]the installment agreement is canceled due to failure to make payment[s] or [due to the occurrence of]because a new liability is established. (2) [Warrants]A warrant will be issued on [all ]each fraudulent overpayment[s] established under Subsection 35A-4-405(5), even if[ there is] an installment agreement is in effect, and a warrant[s] on [such]the overpayment[s], penalty[ies], and costs will be renewed until the overpayment, penalty, and costs have been paid in full. (3) No warrant[s] will be issued on a non[-]fault overpayment[s] established under Subsection 35A-4-406(5). R994-305-102. Charging[e] Off [Policy for ]a Nonfault Overpayment[s]. (1) A[ll] nonfault overpayment[s] established under Subsection 35A-4-406(5) may be charged off and removed from the records of the Department after three years without further review unless a payment or offset has been made within the prior 90 days. (2) [These debts]A nonfault overpayment that has been charged off will be forgiven [and forgotten ]and no further collection or offset will [take place]occur. R994-305-103. Writing[e] Off [Policy for ]Other Overpayments. (1) Except for a fraud overpayment[s] established under Subsection 35A-4-405(5), [all ]each accounts receivable overpayment[s] for claimant and employer liabilities, including interest and penalties [which]that have not been collected or offset within three years after the filing of a warrant, may be reviewed for determination of collectability. (2) If the Department[it is] determines[d] on the information reasonably available[ to the Department] that the delinquent claimant or employer has no known assets [which are ]subject to [the ]attachment[,] and [it appears there is no likelihood of collection in the foreseeable future]that collection is unlikely, the Department may write off the account. (i) [All ]The Department shall cease collection or offset action [shall cease as far as enforcement of collection procedures are concerned]for a debt that has been written off under Subsection (2). (ii) [However, c]Consistent with general accounting principles, if the Department receives money by virtue of a warrant judgment on a debt that has been written off, the Department will reinstate the equivalent portion of the debt and retain the collected monies. R994-305-104. Contribution Interest and Penalties. (1) An unpaid contribution described in Subsection 35A-4-305(1)(a) shall bear interest at the rate of 1% per month. (2) The Department shall assess a penalty against an employer in an amount equal to 5% of the contribution due if the employer fails: (a) to file a contribution report when due unless the employer: (i) files the contribution report after the required time; and (ii) demonstrates that the failure to file the report timely was due to reasonable cause and not willful neglect; or (b) to pay a contribution as required by Subsection 35A-4-305(1)(c)(i) unless the employer: (i) makes arrangements with the Department for payment within ten days after the written demand is mailed or personally delivered; and (ii) pays in accordance with those arrangements. (3) The interest and penalties under this section are not exclusive but are in addition to any other penalties, charges, interest, or remedies provided by law. R994-305-201. Employee Misclassification Penalty. (1) Authority and Scope. This rule establishes the penalty under Subsection 35A-4-305(2)(e) for an employer who fails to file a report or who files an incorrect report due to the employer's misclassification of an employee.(2) The Department shall assess a penalty against an employer if the Department determines that the employer misclassified an individual as an independent contractor or other non-employee but the individual was an employee under relevant law at the time services were performed. (3) The penalty for an employer's misclassification of an employee shall be as follows. (a) First Misclassification. For the employer's first misclassification of an employee, the employer shall be assessed a penalty of 0.1% (0.001) of the wage base per misclassified employee per reporting period. (b) Subsequent Misclassifications. For a subsequent misclassification of the same or any other employee, including a failure to cure a prior misclassification, the employer shall be assessed a penalty of 1% (0.01) of the wage base per misclassified employee per reporting period. (4) Each penalty under this section: (a) will be calculated using the wage base at the time the Department issues the determination that the employer misclassified the employee; and (b) is not exclusive but is in addition to any other penalties, charges, interest, or remedies provided by law. (5) Disclosure to Federal Authorities. If an employer misclassifies ten or more employees and fails to cure the misclassification within 90 days of a final audit report, the Department will notify the United States Department of Labor under Section R994-312-103. (6) Penalties received under this section will be deposited in the Workforce Initiatives Fund and used only for the administration of the Department's field audit integrity efforts. R994-305-801. Wage List Requirements. (1) Federal Requirement.
(a) Section 1137 of the Social Security Act requires employers to submit quarterly wage reports to a state agency. (b) The[is] Department is the designated agency for [the state of ]Utah. (c) The [Unemployment Insurance Division of the ]Department uses wage information submitted by employers to establish benefit determinations for claimants and to verify employer contribution payments. (2) Wage List Due Date, Extensions, and Required Forms. (a) Wage lists are due the last day of the month following the end of the calendar quarter. (b) Wage list due dates may be changed and extensions granted under the same requirements established for contribution reports in Rule R994-302. (c) Contributory employers must file a wage list with [the ]Form 3, Employer's Contribution Report. (d) Reimbursable employers must file a wage list with [the ]Form 794, Insured Employment and Wage Report. Reimbursable employers must not file a wage list with Form 794-N, Non-insured Employment and Wage Report.[Wage lists are due the last day of the month following the end of the calendar quarter.] (e[b])(i) Domestic employers electing to file an annual report must file a wage list with [the ]Form 3D, Domestic Employer's Annual Report. (ii) The wage list is due January 31 of the year following the year wages were paid.[ (c) Reimbursable employers must not file a wage list with Form 794-N, Non-insured Employment and Wage Report. (d) Wage list due dates may be changed and extensions granted under the same provisions established for contribution reports in Rule R994-302.] (3) Wage Information Required.
(a) Each page of the wage list must be identified by the employer's Utah registration number, the employer's name, and the quarter and year being reported. (b) Only those employees who were paid wages during the quarter should be reported on the wage list. The following information must be provided for each employee as a line item on each wage list in the following order: ([a]i) social security number; ([c]iii) gross wages paid during the quarter[. ] pursuant to Section 35A-4-204 defining[es] subject employment and Section 35A-4-208 defining[es] wages.[ Only those employees who were paid wages during the quarter should be reported on the wage list.] (4) Wage Reporting Methods.[
] The Department will accept wage lists filed on the Department website. (5) Wage List Total Must Equal the Quarterly Report Total.
(a) The total amount of wages reported on the wage list must be the same as the total wages shown on [the ]Form 3, Employer's Contribution Report. (b) The total of the wage list for a reimbursable employer must be the same as the total wages shown as "insured payroll" on Form 794, Insured Employment and Wage Report. (c) Wage lists consisting of more than one page must show the employer's Utah registration number, the quarter and year of the reporting period, a total for each page, and a grand total for [all]each page[s] on the first page. (6) Wage Lists Corrections for Prior Quarters.
(a) Corrections to wage lists for prior quarters must be made on a separate report and not on the wage list for the current quarter. The employer must submit the following information for each employee in the following order:
(i) social security number;
(ii) full name; and
(iii) gross wages that should have been properly reported.
(b) Each page of the wage list adjustment[s] must be identified by the employer's Utah registration number, the employer's name, and the quarter and year. (c) The employer must submit an explanation for the corrections[ being made]. (d) Corrections to wages may result in additional contributions being assessed or refunded.
(7) Penalty for Failure to Provide Wage List Information.
(a) A penalty may be assessed for each failure to submit a wage list by the due date as specified in this rule or for failure to submit a wage list in an acceptable format as specified in this rule. The penalty amount is $50 for every 15 days, or fraction thereof, that the filing is late or not in an acceptable format, not to exceed $250 per filing.(b) The penalty will be collected in the same manner and under the same [legal provisions ]requirements as unpaid contributions. (i) The Department may [W]waive[r of] the penalty [will be made ]if the employer [can ]shows good cause for failure to provide the required wage list. (ii) Good cause is established if the employer was prevented from filing a wage list for circumstances that are compelling or beyond the employer's control. (iii) Payment of the penalty does not relieve the employer from the responsibility of filing the wage list in the acceptable format. R994-305-1201. Offer in Compromise.
(1) If an employer or claimant [is unable to]cannot pay the [total amount owing of past due]outstanding contributions, interest, penalties, costs, or fault or nonfault benefit overpayments, the employer or claimant may request an[ application for] offer in compromise[,] pursuant to Subsection 35A-4-305(12). [In order for]To request an offer in compromise[ to be considered], the employer or claimant must: (a) complete an application and provide verification of total income, expenses, assets, and liabilities;
(b) show there is no expectation that financial resources will significantly improve within three years of the date of the application[. Being currently unemployed or underemployed alone is insufficient to meet the requirements of this provision]; (c) not have [a current rejected]had an offer in compromise [issued]rejected by the Utah State Tax Commission within [twelve]12 months of the date of application with the Department; and (d) [have ]not have been granted an offer in compromise by the Department in the ten years [prior to]before [applying for an offer in compromise]the date of application. (2)(a) The Department may compromise a portion of any past due liability for contributions, interest, penalties, or costs to an employer if the employer [can ]shows it [has an inability to]cannot pay the full amount owing within three years of the date of application or payment would result in the insolvency of the employing unit. (b) The Department may compromise a portion of any fault or nonfault overpayment owed by a claimant if the claimant [can ]shows [he or she]the claimant [does not have the ability to]cannot pay the full amount owing within three years of the date of application. (3) If the Department accepts an offer in compromise, the acceptance will be rescinded and the compromised liability will be reestablished if the Department[it is] subsequently determines[d] that: (a) the[any] employer, claimant, or person acting on behalf of [any]the employer or claimant, provided false information or concealed information that lead to the granting of such compromise; (b) the employer or claimant fails to timely pay the total amount agreed upon;
(c) the employer or claimant is not current with [all]each obligation[s] under the [Employment Security ]Act for at least three years from the date of the application; or (d) an offer in compromise is rejected by the Utah State Tax Commission within [twelve]12 months following the date the application with the Department was approved. (4)(a) The Department's offer in compromise determination [of the Department ]is final and not appealable. (b) [However, t]The Department may consider an amended offer in compromise application that is substantially different from the rejected application. (5) A claimant's unemployment or underemployment alone is insufficient to satisfy the requirement of Subsection R994-305-1201(1)(b). KEY: unemployment compensation, overpayments, wage list
Date of Last Change: 2026[July 1, 2019] Notice of Continuation: November 13, 2024
Authorizing, and Implemented or Interpreted Law: 35A-4-305
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