302 N.W.2d 694 | Neb. | 1981
The underlying facts are not in dispute. WNGH is a nonprofit corporation which, on January 1, 1972, elected to become liable for payments to the Unemployment Compensation Fund in lieu of contributions, and has made payments on the reimbursable basis pursuant to Neb. Rev. Stat. § 48-660.01(2) (Reissue 1978). On August 19, 1977, St. Mary Hospital (St. Mary) executed a contract of sale of all its property, assets, and employees to WNGH as purchaser. The property sold specifically included “so much of Seller’s unemployment compensation reserve fund which is legally transferable.” The sale took place on November 30, 1977, and the commissioner was duly notified of the acquisition.
Prior to the sale, St. Mary was an employer subject to the Employment Security Law, and was making contributions to the Unemployment Compensation Fund on the regular contributory basis. These contributions, as provided by Neb. Rev. Stat. § 48-649 (Reissue 1978), required contributions at a maximum rate ranging from 2.7 percent to 3.7 percent of an employer’s annual payroll, depending upon whether
As authority for its request, WNGH cites Neb. Rev. Stat. § 48-654 (Reissue 1978), which states in part: “Any employer that acquires the organization, trade, or business, or substantially all the assets thereof, of another employer shall immediately notify the commissioner thereof, and shall assume the position of such employer with respect to the resources and liabilities of such employer’s experience account as if no change with respect to such employer’s experience account has occurred . . . .” (Emphasis supplied.) The commissioner takes the position that the above statute applies to an acquisition by an employer using the contributory basis and not to an employer using the reimbursable basis. Both parties agree that the issue is one of statutory construction.
The Employment Security Law requires a nonprofit organization to pay contributions on a regular basis unless it elects to reimburse the commissioner
Reimbursement financing is a method which allows the organization to reimburse the Unemployment Compensation Fund for the amount actually paid out. Nonprofit organizations are automatically subject to the regular experience rating provisions unless they elect the reimbursement method of financing. By using this method they are, in essence, self-insurers and are liable for such benefit costs for their employees, but are not liable for the cost of any other benefits. Maryland Empl. Sec. v. Holy Cross Hosp., 43 Md. App. 406, 405 A.2d 766 (1979). They further escape the burden of '-paying the administrative costs of the system. See St. Joseph, etc. v. Employment Sec. Dept., 92 Wash. 2d 353, 597 P.2d 393 (1979).
The two systems are separate and distinct, and a nonprofit organization must elect to use one or the other. WNGH has attempted to overlap the two systems by applying its predecessor’s experience account to its own reimbursement account. We find no authority which allows such action, and logic dictates a contrary conclusion. Section 48-654, which allows an acquiring organization to assume the position of its predecessor with respect to the latter’s experience account, refers to the contribution rate of that employer. The experience account balance is used to determine the rate
In construing a statute, the court must look to the objective to be accomplished, and the purpose to be served, and to place on it a reasonable construction which will best effect its purpose, rather than a construction which will defeat it. Evans v. Metropolitan Utilities Dist., 187 Neb. 261, 188 N.W.2d 851 (1971). We agree with the commissioner and the District Court in determining that the Employment Security Law does not allow a reimbursing employer to acquire the experience account of its predecessor and apply such account against its reimbursement charges. The judgment of the District Court is affirmed.
Affirmed.