Section .0700 - TRANSFER OF EXPERIENCE RATING TO RELATED ENTITY SUCCESSOR ACCOUNT
04 NCAC 24D .0701 TRANSFER OF EXPERIENCE
(a) A new successor employer that acquires a part of an entity related to the transferring employer shall request a percentage of the transferring employer's experience rating when:
(1) the successor employer is a distinct and severable portion of the transferring employer;
(2) it is severed from the control of the transferring employer;
(3) a severable and distinct portion of the successor employer would not be a disregarded entity or subsidiary of the transferring employer but an entity that is operational on its own with no support from the transferring employer;
(4) the successor employer is comprised of shareholders or owners, or employees from the transferring employer; and
(5) the successor employer's operations may remain similar to those of the transferring employer including proprietorships that split between family members as defined in G.S. 96-1(b)(18), spin-off corporations, partnerships that split operations between partners, or any other division in operations, that would not result in denial of a new discrete employer number to the successor employer pursuant to G.S. 96-11.7(c).
(b) A transferring employer shall be left operational on its own with no support from the successor employer.
(c) A successor employer shall request a transfer of experience under conditions described in Rule .0702 of this Section and a transferring employer shall request to retain the remaining experience pursuant to Rule .0702 of this Section.
(d) The percentage of the experience that is transferred to the successor employer shall be transferred as of the date of acquisition for use in determining the successor's contribution rate.
History Note: Authority G.S. 96-4; 96-10; 96-11.7;
Eff. July 1, 2015.