Finding that a liability administrative law judge erred in determining that a company that previously operated a call center in Fishers owed more than $125,000 in unemployment insurance contributions, interest and penalties for a year when the company had no Indiana employees, the Indiana Court of Appeals reversed.
In TPUSA, Inc. v. Unemployment Insurance Appeals of the Indiana Dept. of Workforce Development, 93A02-1207-EX-605, TPUSA Inc. appealed the $125,666.33 judgment levied against it by the Indiana Department of Workforce Development and upheld by the LALJ in 2012 concerning unemployment insurance contributions for the 2010 calendar year. Prior to 2010, TPUSA, owned by a Florida company, had a call center in Fishers, but beginning in October 2009 the facility was closed and no longer had anyone employed in Indiana. TPUSA submitted its 2009 fourth-quarter wage report to the DWD showing no employees and no paid wages, but it did not mark the report final. It did not file any quarterly payroll reports with the department for 2010.
In 2011, the DWD went after TPUSA for overdue unemployment insurance contributions for 2010. TPUSA did not initially respond to notices sent to it by DWD, and the DWD estimated that the company’s overdue contributions, plus interest and penalties, totaled more than $125,000. TPUSA later appealed, but the LALJ affirmed the amount.
The Court of Appeals found the DWD acted properly under the Indiana Unemployment Compensation Act because it was unaware that TPUSA ceased operations in Indiana. TPUSA did not mark its last quarter report in 2009 as “final report” and did not notify the DWD it no longer operated in the state. Thus, DWD expected to continue to receive quarterly contribution and wage reports from the company for 2010.
The statute does allow for a reduction of the estimated amount of contribution if the employer makes a showing of “reasonable cause” for failure to timely file the reports.
“We hold that where an employer has ceased business operations in Indiana, no longer pays wages or has any employees in the state, and files accurate reports with the Department indicating such, this may be considered ‘reasonable cause,’ as required by Indiana Code section 22-4-11-4(b), so as to allow for an adjustment (i.e., reduction) in the amount of the estimated contribution,” Senior Judge Betty Barteau wrote.
Instead, the judges found that a $25 fine assessed under I.C. 22-4-19-10 against any company that negligently or willfully fails to submit any report required under the Act to be proper. Because two reports are required to be filed each quarter, TPUSA owes $200.