Policy
Name:
|
Penalties
for Late Payment and Reporting
|
Policy #:
|
EP-16-01
|
Code/Rule
Reference
|
ORC 4123.32,
4123.41;
OAC 4123-17-16,
4123-17-14.2.
|
Effective
Date:
|
January 1,
2019
|
Approved:
|
Ronald L.
Suttles, Interim Chief Employer Services
|
Origin:
|
Employer
Policy
|
Supersedes:
|
Penalties
for Late Payment and Reporting policy effective July 1, 2018.
|
History:
|
Revised
July 22, 2019; August 15, 2018; April 11, 2014. New policy October 17, 2008.
|
Review
Date:
|
July 1,
2023
|
I. Policy Purpose
BWC
will assess penalties in accordance with the applicable laws and rules whenever
private employers (PA employers) and public employer taxing districts (PEC
employers) pay their required premiums, or file or pay amounts due under the
annual payroll report, after established due dates. This policy explains
current and historical penalty information.
II. Applicability
This
policy applies to BWC Employer Services, BWC Finance, PA employers, PEC
employers, and their authorized representatives.
III. Definitions
A.
Deferment fee: The fee BWC charges to a PEC employer
who defers payment of installments due prior to April 30. The fee is 0.94
percent (0.94%) of the total amount of the deferred installments.
B.
Installment due
date: The date on the
invoice provided by BWC indicating when premiums are due.
C.
Penalty: BWC assesses penalties to employers for
late payment, and for failure to file or pay amounts due under the annual
payroll report. The penalty for late payment may be a percentage of the premium
due. The penalty for failure to file or pay amounts due under the annual
payroll report is removal from all rating plans and discount programs.
D.
True-up due date: For PA employers, this date is August
15 immediately following the conclusion of policy years ending on or after June
30, 2016. For PEC employers, this date is February 15 immediately following the
conclusion of policy years ending on or after December 31, 2016.
IV. Policy
A.
PA employer late
payment penalties for policy years beginning on or after July 1, 2015: BWC may
assess a penalty at the interest rate established by the state
tax commissioner pursuant to ORC 5703.47 if an employer
fails to pay premium or assessments by the installment due date. The minimum
penalty amount is six dollars ($6).
B.
PA employer late
payment penalties for policy years beginning prior to July 1, 2015.
1.
As used here, “prime
interest rate” means the average bank prime rate. BWC shall determine this rate
in the same manner as a county auditor determines the average bank prime rate
under ORC 929.02. BWC will use the Federal Reserve Board’s
H.15 Selected Interest Rates publication every June to
determine the prime interest rate for the subsequent policy year beginning July
1.
2.
If a PA employer
fails to report actual payroll within two months after the end of the payroll
period, BWC will increase the amount due by an amount equal to one percent (1%)
of the unpaid premium. This increase shall not be more than fifteen dollars
($15) or less than three dollars ($3).
3.
If a PA employer
fails to pay premium when due, BWC will add a late reporting fee of not more
than thirty dollars ($30) to the premium, plus an additional penalty as follows:
a.
For a premium
sixty-one (61) to ninety (90) days past due, the penalty will equal the prime
interest rate multiplied by the premium due;
b.
For a premium ninety-one
(91) to one hundred twenty (120) days past due, the penalty will equal the
prime interest rate plus two percent (2%), multiplied by the premium due;
c.
For a premium one
hundred twenty-one (121) to one hundred fifty (150) days past due, the penalty
will equal the prime interest rate plus four percent (4%), multiplied by the
premium due;
d.
For a premium one
hundred fifty-one (151) to one hundred eighty (180) days past due, the penalty
will equal the prime interest rate plus six percent (6%), multiplied by the
premium due;
e.
For a premium one
hundred eighty-one (181) or more days past due, the penalty will equal the
prime interest rate plus eight percent (8%), multiplied by the premium due.
4.
At no time shall the
additional penalty exceed fifteen percent (15%) of the premium due.
5.
BWC will use the
average prime rate in effect at the time of the premium payment to calculate
actual penalties.
C.
PEC employer late
payment penalties.
1.
BWC may assess a
penalty at the interest rate established by the state
tax commissioner pursuant to ORC 5703.47 if a PEC employer
fails to pay premium or assessments by the installment due date. The minimum
penalty amount is six dollars ($6).
2.
ORC 4123.41
establishes the payment due dates for PEC employers.
a.
For policy years
beginning on or after January 1, 2017, the total amount of estimated annual
premium is due by December 31, unless the employer participates in an
installment payment plan. See the Prospective
Billing Installment Payments policy for additional information.
i.
BWC will invoice all
eligible PEC employers on a twelve (12) payment installment plan.
ii.
A PEC employer may
elect to defer payment of installments due prior to April 30. If such election
is made, BWC will charge the employer a deferment fee.
b.
For the policy year
beginning January 1, 2016:
i.
On or before May 16,
2016, no less than fifty percent (50%) of the premium due.
ii.
One or before
September 1, 2016, the total premium due.
c.
For the policy year
beginning January 1, 2015:
i.
On or before May 16,
2016, no less than fifty percent (50%) of the premium due.
ii.
On or before
September 1, 2016, the total premium due.
d.
For policy years
beginning on or before January 1, 2014:
i.
On or before May 15
no less than forty-five percent (45%) of the annual premium due.
ii.
On or before
September 1 the total annual premium due.
D.
Penalties for
failure to file or pay amounts due under the annual payroll report (also known
as true-up). See the Payroll
True-Up policy for additional information.
1.
BWC will remove the
employer from all rating plans and discount programs for the policy year
immediately following the policy year to which the annual payroll report
pertains. The employer will be base or experience rated as determined by the
expected losses of the employer pursuant to OAC 4123-17-33 and 4123-17-34.
2.
The employer may be
ineligible for future program participation. See the specific program policy
for additional information.
3.
The premium and
assessments due from the employer for the policy year to which the annual
payroll report pertains will be calculated based on the estimated payroll of
the employer used in calculating estimated premium due, increased by ten
percent (10%).
E.
BWC may establish a
grace period during which a penalty will not be assessed to an employer for
late payment or late reporting.
F.
Resolution of
complaints.
1.
Employer complaints for
late payments should be processed under the Retroactive
Coverage and Penalty Abatement policy.
2.
Employer complaints
for late reporting should be processed under the Payroll
True-Up policy.
3.
An employer may
appeal late fees and penalties through BWC’s adjudication process (ORC 4123.291).
4.
BWC may certify the
amount of premium due to the Office of the Attorney General of Ohio (AG) for
collection. BWC may also assess penalties on any premium the AG collects unless
the AG agreement states otherwise.