26 A.D.2d 968 | N.Y. App. Div. | 1966
Appeal from a decision of the Unemployment Insurance Appeal Board which sustained the determination of the Industrial Commissioner revising the employer-appellant’s rate of contribution from 1.5% to 2.3% effective May 23, 1964. On May 23, 1964, Noma Corporation and Ward Baking Company merged and the name of the merged corporation was changed to Ward Foods, Inc., which assumed all of the obligations of Noma. Ward paid $2,700,000 in securities for Noma and' continued the business that Noma had been engaged in up to the date of the merger; i.e., the management of numerous subsidiary corporations. At the time of the merger, Noma had 7 employees, 2 of whom continued in the employ of the merged corporation, while Ward employed approximately 950 people. More than a year prior to the merger, Noma Corporation transferred to a new corporation, Noma Lites, Inc., certain manufacturing facilities. The Industrial Commissioner held that this constituted a partial transfer pursuant to section 581 (subd. 4) of the Labor Law. On December 31, 1963, Noma’s “employer’s account” reflected a negative balance of $28,753.26 of which all but $1,447.92 had been transferred as a charge to the general account, and, in addition, it had reflected negative balances on the computation dates of July 1, 1961 and July 1, 1962. On December 31, 1963, Ward’s “employer’s account” reflected a positive balance of $397,340.36. Prior to the merger, Noma’s normal rate of contribution was 3.2% plus .6% subsidiary tax, or a total of 3.8%, while Ward’s rate of contribution was .9% plus the subsidiary tax of .6%, or a total of 1.5%. As a result of the merger, the Industrial Commissioner combined the “employer’s accounts” of Ward and Noma into a single account, and recomputed Ward’s contribution rate on the basis of the revised account, making a normal rate of 1.7% plus a subsidiary tax of .6% or a total of 2.3%. This computation was made by adding together the balances of the two com