(a) Scope. This section shall govern the Texas Workforce
Commission in its administration of the Common Paymaster provisions
authorized under §201.011(11) of the Act.
(b) Definitions. The following definitions shall apply
to §201.011(11) of the Act:
(1) Common Paymaster--A Common Paymaster of a group
of related corporations is any member thereof that disburses remuneration
to employees of two or more of those corporations on their behalf
and that is responsible for keeping books and records for the payroll
with respect to those employees. The following are also incorporated
into this definition:
(A) The Common Paymaster is not required to disburse
remuneration to all the employees of those two or more related corporations,
but the provisions of this section do not apply to any remuneration
to an employee that is not disbursed through a Common Paymaster;
(B) A group of related corporations may only have one
Common Paymaster for the group. A group of related corporations may
not be subdivided to facilitate multiple Common Paymasters; and
(C) When two or more related corporations concurrently
employ the same individual and compensate that individual through
a Common Paymaster, which is one of the related corporations for which
the individual performs services, each of the corporations is considered
to have paid only the remuneration it actually disburses to that individual,
unless the disbursing corporation fails to remit the taxes due.
(2) Related Corporations--Two or more corporations
shall be considered related corporations for an entire calendar quarter
if they satisfy any of the following tests at any time during that
calendar quarter:
(A) Parent-subsidiary controlled group. The common
parent corporation owns stock possessing more than 50 percent of the
total combined voting power of all classes of stock entitled to vote
or more than 50 percent of the total value of shares of all classes
of stock of at least one of its subsidiaries, AND one or more of the
corporations, common parent included, owns stock possessing more than
50 percent of the total combined voting power of all classes of stock
entitled to vote or more than 50 percent of the total value of shares
of all classes of stock of each of the subsidiaries;
(B) Brother-sister controlled group. Five or fewer
persons who are individuals, estates, or trusts own more than 50 percent
of the total combined voting power of all classes of stock entitled
to vote or more than 50 percent of the total value of all classes
of stock of each corporation, taking into account the stock ownership
of each person only to the extent such stock ownership is identical
with respect to each such corporation;
(C) Combined group. A group of three or more corporations
if:
(i) Each such corporation is a member of either a parent-subsidiary
controlled group of corporations or a brother-sister controlled group
of corporations; and
(ii) At least one of such corporations is the common
parent of a parent-subsidiary controlled group and also is a member
of a brother-sister controlled group;
(D) When a corporation that does not issue stock is
involved, either:
(i) 50 percent or more of the members of one corporation's
board of directors (or other governing body) are members of the other
corporation's board of directors (or other governing body); or
(ii) The holders of 50 percent or more of the voting
power to select members of one corporation's board of directors (or
other governing body) are concurrently the holders of more than 50
percent of that power with respect to the other corporation;
(E) 50 percent or more of one corporation's officers
are concurrently officers of the other corporation; or
(F) 30 percent or more of one corporation's employees
are concurrently employees of the other corporation.
(3) Concurrent Employment--means the simultaneous existence
of an employment relationship between an individual and two or more
corporations. Such a relationship contemplates the performance of
services by the individual for the benefit of the employing corporation,
not merely for the benefit of the group of corporations, in exchange
for remuneration. The following are also incorporated into this definition:
(A) The simultaneous existence of an employment relationship
with each corporation is a decisive factor. If it exists, the fact
that a particular employee is on leave or otherwise temporarily inactive
is immaterial;
(B) Employment is not concurrent with respect to one
of the related corporations if the employee's employment relationship
with that corporation is completely nonexistent during the periods
when the employee is not performing services for that corporation;
(C) An individual who does not perform substantial
services for a corporation is presumed not employed by that corporation;
and
(D) A corporation which has no employees performing
services for it in Texas cannot be the Common Paymaster for Texas
employees of its related corporations.
(c) Submission and approval of Common Paymaster.
(1) Related corporations which compensate their employees
through a Common Paymaster shall file with the Agency the details
of their plan on a form prescribed by the Agency. The details shall
include the names of the related corporations, the name of the Common
Paymaster corporation and the concurrently employed individuals involved.
The filing shall include documentation to substantiate the corporations
are related as defined in subsection (b)(2) of this section and that
employees are the concurrently employed. An amendment to the plan
shall be filed whenever there is a change in the related corporations
participating in the plan, a change in the Common Paymaster or a change
in the concurrently employed individuals involved.
(2) Plans and plan amendments submitted pursuant to
this rule shall be filed within the 30-day period following the end
of the calendar quarter in which the plan is in effect. Eligibility
of an employee to be compensated through a Common Paymaster shall
be determined on a quarterly basis.
(d) Allocation of employment taxes.
(1) A Common Paymaster making disbursements on behalf
of related corporations to employed individuals shall be responsible
for taxes, interest and penalties on all wages disbursed by it.
(2) If the Common Paymaster fails to remit taxes, interest
and penalties on all wages disbursed by it as required:
(A) the Agency may hold each of the related corporations
liable for a proportionate share of the obligation. Such proportionate
share may be based on sales, property, corporate payroll or any other
reasonable basis that reflects the distribution of services of the
pertinent employees between the related corporations; or
(B) if there is no reasonable basis for allocating
the amount owed, it shall be divided equally among the related corporations.
If a related corporation fails to pay any amount allocated to it pursuant
to this section, the Agency may hold any or all of the other related
corporations liable for the full amount of the unpaid taxes, interest
and penalties.
(3) A Common Paymaster is not a successor corporation
pursuant to Texas Labor Code Chapter 204, Subchapter E, for concurrent
employees unless the related corporation ceases operations and is
acquired in its entirety by the paymaster corporation.
(4) Wages paid by separate employing units may not
be aggregated or combined for purposes of reporting, except as provided
in this rule, unless there is an actual transfer of entity and experience
rating as provided by Texas Labor Code Chapter 204, Subchapter E.
(e) Benefits.
(1) For purposes of charging benefits paid and mailing
notices to base year employers, the Common Paymaster shall be considered
the employer for all wages disbursed to individuals by the Common
Paymaster whether payment was for services performed for the Common
Paymaster or for a related corporation.
(2) An employer seeking to establish a Common Paymaster
arrangement shall designate a mailing address for benefit claim notices
with the Agency per §208.003 of the Act.
(f) Examples.
(1) Common Paymaster. S, T, U, and V are related corporations
with 2,000 employees collectively. Forty of these employees are concurrently
employed and perform services for S and at least one other of the
related corporations, during a calendar quarter. The four corporations
arrange for S to disburse remuneration to thirty of these forty employees
for their services. Under these facts, S is the Common Paymaster of
S, T, U, and V with respect to the thirty employees. S is not a Common
Paymaster with respect to the remaining employees.
(2) Related Corporations:
(A) Parent-subsidiary controlled group.
Cont'd... |