LIABILITY OF EMPLOYERS FOR INTEREST UPON UNEMPLOYMENT COMPENSATION CONTRIBUTIONS DELINQUENTLY PAID
1. One has constructive knowledge of statutes and regulations promulgated pursuant to statutory authority.
2. The Commissioner of the Employment Security Department has no authority to waive an interest charge except as specifically provided by statute.
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April 5, 1950
Honorable J. H. Robertson
Employment Security Department
State of Washington
Olympia, Washington Cite as: AGO 49-51 No. 249
Dear Mr. Robertson:
We quote from your letter of April 5, 1950, wherein you request the opinion of this office:
"The opinion of your office is requested concerning the liability of an employer for interest upon delinquently paid unemployment compensation contributions.
"The employer in question, a joint adventure, is composed of two corporations which, for several years prior to the commencement of the joint adventure, had been liable for and had paid unemployment compensation contributions when due. Shortly prior to commencing the joint adventure operation, the employer's office manager now claims to have addressed an inquiry to this Department requesting unemployment compensation contribution forms. This letter was never received by the Department. Slightly more than eight months later the office manager again requested forms and upon discovery that the unemployment compensation tax accrued quarterly, [[Orig. Op. Page 2]] claims non-liability for the interest accrued upon the delinquently paid contributions for the reason that he believed the tax became due annually. It might be further noted that the tax in question did not become delinquent nor did any interest accrue thereon until more than four months subsequent to the initial inquiry which the Department apparently did not receive.
"The employer raises no question concerning its liability for the tax, merely asserting that no interest is due because it failed to receive information upon inquiry to the Department requesting contribution forms and 'any other information that would be beneficial to us'.
"As prescribed by statute, the tax in question falls due as provided by regulations which have since 1937 prescribed a quarterly date for payments with a thirty day grace period before the accrual of interest commences. All regulations have been published as prescribed by § 55 of the Unemployment Compensation Act.
"Your opinion is requested concerning whether such an employer has constructive knowledge of the regulations establishing the dates upon which unemployment compensation contributions become due, and whether the employer is liable for interest upon the delinquently paid unemployment compensation contributions. Your opinion is also requested concerning whether the Commissioner of the Employment Security Department may waive such interest charge."
The conclusions reached may be summarized as follows:
Knowledge of the Unemployment Compensation Act and the regulations promulgated pursuant to the provisions thereof is imputed to the employer. Such employer is, therefore, liable for interest [[Orig. Op. Page 3]] upon the delinquently paid unemployment compensation contributions, and such liability may not be waived by the Commissioner of the Employment Security Department.
Section 92, chapter 35, Laws of 1945, (§ 9998-230 Rem. Supp. 1945) in part provides:
"If contributions are not paid on the date on which they are due and payable as prescribed by the Commissioner, the whole or part thereof remaining unpaid shall bear interest at the rate of one per centum per month from and after such date until payment plus accrued interest is received by him. * * *"
As stated in your letter the Commissioner has prescribed a quarterly due date for unemployment compensation contributions. It is a rule of law that properly promulgated administrative regulations are held to be as effective as statutes and binding upon all persons subject to them without notice, and in addition, the court shall take judicial notice of them, 42 Am.Jur., Public Administrative Law, § 102, Brooks v. Seattle, 193 Wash. 253. Therefore, the employer in question had not only knowledge of the provisions of § 92 of the Unemployment Compensation Act, quoted supra, which specifically provides that interest shall accrue at the rate of one per cent per month on and after the date of delinquency, but also must be deemed to have had knowledge of the date prescribed by the Commissioner upon which the contributions would become due and payable.
In answer to your inquiry concerning whether the Commissioner of the Employment Security Department may waive the interest charge in question, your attention is directed to the provisions of § 92, chapter 35, Laws of 1945, (§ 9998-230 Rem. Supp. 1945), which provides that in two instances interest shall not accrue, i.e., (1) from the date any estate is in the hands of the receiver, executor, administrator, trustee in bankruptcy, etc., and (2) where an employer's liability for unemployment compensation contributions is in question and "* * * adequate information has been furnished the department and the department has failed to act or had advised the employer of no liability or inability to decide the issue, interest may be waived." It is assumed that the employer in question did not become insolvent, and your letter specifies that there was no question raised pertaining to the liability of this employer for unemployment compensation [[Orig. Op. Page 4]] contributions. Therefore, inasmuch as neither of the statutory conditions prescribing the possible waiver of interest exists, the Commissioner cannot waive the interest charge in question, for his authority to compromise claims for unemployment compensation contributions or to waive interest thereon, exists only by reason of express legislative authority, 51 Am.Jur., Taxation, §§ 968, 978.
It is, therefore, the opinion of this office that the employer in question is liable for interest upon the delinquently paid unemployment compensation contributions, for it must be deemed that such employer had knowledge of the Unemployment Compensation Act and the regulations promulgated pursuant to the provisions thereof; you are further advised that the Commissioner of the Employment Security Department has no authority to compromise or waive such liability.
Very truly yours,
WILLIAM J. MILLARD, JR.
Assistant Attorney General