V.I. Code tit. 24, § 309 (2019)
2019 US Virgin Islands Code|Title 24 - Labor|Chapter 12 - Virgin Islands Unemployment Insurance|§ 309. Collection of delinquent and contested contributions—Interest on past-due contributions

 (a) If contributions or payments in lieu of contributions are not paid on the date on which they are due and payable as prescribed by the Commissioner of Labor, the whole or part thereafter remaining unpaid shall bear interest at a rate of 9% per annum from such due date until payment is received by the Commissioner of Finance. Interest collected pursuant to the provisions of this subsection, on and after the date following the United States Secretary of Labor's approval of the Virgin Islands Unemployment Insurance Act within which designates the Virgin Islands as a “State”, shall be paid into the Penalty and Interest Fund established under section 311a of this title. No interest shall be assessed if the delinquency by the employer is the result of an administrative error. Collection by suit  (b)  (1) If any employer defaults in any payment of contributions or in payments in lieu of contributions, or interest or penalty thereon, the amount due may, in addition to or alternatively to any other method of collection prescribed in this chapter, be collected by civil action in the name of the Commissioner of Labor in any court of competent jurisdiction, and the employer adjudged in default shall pay the costs of such action. Civil actions brought under this section to collect contributions or interest thereon from an employer shall be heard at the earliest possible date and shall be entitled to preference upon the calendar of the court over all other civil actions except petitions for judicial review under section 306 of this title and cases arising under the Workers' Compensation Administration Law of the Virgin Islands. (2) Any employing unit which is not a resident of the Virgin Islands and which exercises the privilege of having one or more individuals perform service for it within the Virgin Islands, and any resident employing unit which exercises that privilege and thereafter removes from the Virgin Islands shall be deemed thereby to appoint the Lieutenant Governor as its agent and attorney for the acceptance of process in any civil action under this subsection. In instituting such an action against any such employing unit the Commissioner shall cause such process or notice to be filed with the Lieutenant Governor and such service shall be sufficient service upon such employing unit, and shall be of the same force and validity as if served upon it personally within this State. Provided, that the Commissioner shall forthwith send notice of the service of such process or notice, together with a copy thereof to such employing unit at its last known address and the Commissioner's affidavit of compliance with the provisions of this section, and a copy of the notice of service shall be appended to the original of the process filed in the court in which such civil action is pending. (3) Any court of competent jurisdiction in the Virgin Islands shall in the manner provided in paragraphs (1) and (2) of this subsection entertain actions to collect contributions or payments in lieu of contributions or interest thereon for which liability has accrued under the employment security law of any state or of the Federal Government. (4) No suit (including an action for a declaratory judgment) shall be maintained and no writ or process shall be issued by any court of the Virgin Islands which has the purpose or effect of restraining, delaying or forestalling the collection of any contributions or payments in lieu of contributions under this chapter or substituting any collection procedure for those prescribed by this chapter. Priorities under dissolutions or distributions  (c) In any distribution of an employer's assets, judicially ordered or otherwise, including dissolution, reorganization, receivership, assignment for the benefit of creditors, administration of estates of decedents, compositions, or any similar situation, any claims for contributions, or payment in lieu of contributions and interest thereon due or accrued under this chapter which have not been reduced to a lien in accordance with the provisions of subsection (e) of this section shall be paid in full, prior to all other claims which have not been reduced to liens, including claims for taxes or other debts due the Virgin Islands. Provided, that where both a claim for contributions or payments in lieu of contributions, and a claim for wages, neither of which has been reduced to a lien, are owed by such employer, the order of priority as between such claims and other claims which have not been reduced to a lien shall, notwithstanding any other provisions of the law of the Virgin Islands to the contrary, be as follows: (1) such claims for wages, other than the remuneration of officers of corporations, in the amount of $400 to each worker, earned within 6 months of the commencement of the proceeding, or of the date of adoption of an arrangement not judicially ordered for the distribution of an employer's assets; (2) such claims for contributions and interest thereon due or accrued under this chapter; and (3) other claims in the order of priority provided by other provisions of law. Refunds  (d)  (1) If any individual or organization makes application for refund or credit of any amount paid as contributions or payments in lieu of contributions, interest, or penalty under this chapter and the Commissioner determines that such amount or any part thereof was erroneously collected, he may, in his discretion, (i) allow a credit, without interest, in connection with subsequent contribution payments or payments in lieu of contributions or refund from the Fund or from the contribution moneys or payments-in-lieu-of-contributions moneys in the clearing account of the Fund, without interest, the amount of contributions or payments in lieu of contributions erroneously paid, and (ii) allow a credit, without interest, in connection with subsequent interest or penalty, or refund from the interest or penalty moneys in the clearing account of the Fund or from the Penalty and Interest Fund, without interest, the amount of interest and penalty erroneously paid; Provided, that any contributions, payments in lieu of contributions, interest or penalty determined to have been erroneously collected shall, if refund or credit is allowed, be charged against the same fund into which such money was paid or the successor to such fund. No refund or credit shall be allowed with respect to a payment as contributions, payments in lieu of contributions, interest, or penalty unless an application therefor shall be made on or before whichever of the following dates is later: (A) one year from the date on which payment was made; or (B) three years from the last day of the period with respect to which such payment was made. If the Commissioner determines that contributions or payments in lieu of contributions or interest or penalty were erroneously paid to the Virgin Islands on wages insured under the employment security law of some state or of the Federal Government, refund or adjustment thereof may be made without interest, irrespective of the time limits provided in this subsection, on satisfactory proof that contributions or payments in lieu of contributions or interest or penalty on such wages have been paid to such state or to the Federal Government. Nothing in this chapter, or any part thereof, shall be construed to authorize any refund or credit of money due and payable under the law and regulations in effect at the time such money was paid. (2) In the event that any application for refund or credit is rejected, a written notice of rejection shall be forwarded to the applicant. Within 15 days after the mailing of such notice to the applicant's last known address, or in the absence of such mailing, within 15 days after delivery of such notice, the applicant may appeal to a hearing examiner setting forth the grounds for such appeal. Proceedings on such appeal shall be in accordance with the provisions of subsection (f) of this section. Assessments  (e)  (1) If any employer files reports for the purpose of determining the amount of contributions due but fails to pay any part of the contributions or interest due thereon, or fails to file such reports when due, or files an incorrect or insufficient report, the Commissioner may assess the contributions or interest due on the basis of the information submitted by the employer or on the basis of an estimate as to the amount due and shall give written notice of such assessment to such employer. Within fifteen days after such notice was mailed to the employer's last known address, or otherwise delivered to him, the employer may appeal to a hearing examiner setting forth the grounds for such appeal. Proceedings on such appeal shall be had in accordance with the provisions of subsection (f) of this section. (2) If the Commissioner determines that the collection of any contributions or payments in lieu of contributions or interest under the provisions of this chapter will be jeopardized by delay, he may, whether or not the time prescribed by this chapter or any regulations issued pursuant thereto for making reports and paying such contributions or payments in lieu of contributions has expired, immediately assess such contributions or payments in lieu of contributions together with interest, and shall give written notice of such assessment to the employer. In such cases the right of appeal to a hearing examiner shall be conditioned upon payment of the contributions or payments in lieu of contributions and interest so assessed or upon giving appropriate security as determined by the Commissioner to the Commissioner of Finance for the payment thereof. (3) If an employer fails to pay the amount assessed pursuant to this section, the Commissioner of Labor may file with the clerk of any court of competent jurisdiction of the Virgin Islands a certificate under his official seal, stating: the name of the employer, his address, the amount of the contributions or payments in lieu of contributions and interest assessed and in default, and that the time in which a judicial review is permitted, pursuant to subsection (f) of this section, has expired without such appeal having been taken (or that delay will jeopardize collection), and thereupon such clerk shall enter into the judgment docket of the court the name of the employer mentioned in the certificate, the amount of such contributions or payments in lieu of contributions and interest assessed and in default and the date such certificate was filed. When such certificate is duly filed and recorded, the amount of the assessment shall be a lien upon the entire interest of the employer, legal or equitable, in any property, real or personal, tangible or intangible, situated in the jurisdiction where the certificate or a copy thereof was filed. The priority of said liens shall be governed by the same rules as apply to that of a lien for taxes under the law of the Virgin Islands. No lien for contributions or payments in lieu of contributions or interest shall be valid against one who purchases personal property from the employer in the usual course of his business in good faith and without actual notice of such lien. Such lien may be enforced against any real or personal property in the same manner as a judgment of the District Court and the Superior Court duly docketed. (4) The foregoing remedies shall be in addition to all other remedies. Hearing before the hearing examiner  (f) Upon appeal from an assessment or from a denial of a claim for refund or credit and after affording appellant and the Commissioner a reasonable opportunity for a fair hearing, the hearing examiner shall make findings of fact and conclusions of law and on the basis thereof affirm, modify, or reverse the action of the Commissioner. The conduct of such hearings shall be consistent with the provisions of section 306(c) of this title. Judicial review  (g) The hearing examiner's decision shall be final unless within fifteen days after the notice was mailed to the last known address of a party, or otherwise delivered to it, that party initiates a proceeding for a judicial review in accordance with section 306(e) of this title. Conclusiveness of determination  (h) Any determination or decision duly made in proceedings under subsection (b), (e), (f), or (g) of this section which has become final shall be binding in proceedings under subsection (d), (f), or (g) of this section relating to applications for refund or credit, insofar as such determination or decision necessarily involves the issue of whether an employing unit constitutes an employer or whether service performed for, or in connection with, the business of such employing unit constitutes employment. Liability of successor  (i)  (1) Any individual or organization (including the types of organizations described in section 302(j) of this title), whether or not an employing unit, which acquires the organization, trade or business, or a substantial part of the assets thereof, from an employer shall be liable, in an amount not to exceed the reasonable value of the organization, trade, business, or assets acquired, for any contributions or payments in lieu of contributions or interest due or accrued and unpaid by such employer, and the amount of such liability shall, in addition, be a lien against the property or assets so acquired which shall be prior to all other liens. Provided, that the lien shall not be valid as against one who acquired from the successor any interest in the property or assets in good faith, for value and without notice of the lien. On written request, made after the acquisition is completed, the Commissioner shall furnish the successor with a written statement of the amount of contributions or payments in lieu of contributions and interest due or accrued and unpaid by the employer as of the date of such acquisition, and the amount of the liability of the successor or the amount of the lien shall in no event exceed the liability disclosed by such statement. The foregoing remedies shall be in addition to all other existing remedies against the employer or his successor. (2) That the following applies regarding assignment of rates and transfers of experience: (A) If an employer transfers its trade or business, or a portion thereof, to another employer and, at the time of the transfer, there is substantially common ownership, management or control of the two employers, then the unemployment experience attributable to the transferred trade or business must be transferred to the employer to whom the business is so transferred. The rates of both employers must be recalculated and made effective immediately upon the date of the transfer of trade or business. The transfer of some or all of an employer's workforce to another employer is considered a transfer of trade or business when, as the result of the transfer, the transferring employer no longer performs trade or business with respect to the transferred workforce, and the trade or business is performed by the employer to whom the workforce is transferred. (B) If, following a transfer of experience under paragraph (2), the Commissioner determines that a substantial purpose of the transfer of trade or business was to obtain a reduced liability for contributions, then the experience rating accounts of the employers involved must be combined into a single account and a single rate assigned to the account. (3) Whenever a person who is not an employer under this section at the time it acquires the trade or business of an employer, the unemployment experience of the acquired business must not be transferred to the person, if the Commissioner finds that the person acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead the person must be assigned the applicable rate or a rate of 1.0% new employer rate under title 24 Virgin Islands Code, chapter 12, section 308, subsection (b). In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the Commissioner must use objective factors which may include the cost of acquiring the business, how long such business enterprise was continued, or whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition. (4)  (A) If a person knowingly violates or attempts to violate subsections (i)(2) or (i)(3) or any other provision of this section related to determining the assignment of a contribution rate, or if a person knowingly advises another person in a way that results in a violation of the provision, the person shall be subject to the following penalties: (i) If the person is an employer, then the employer must be assigned the highest rate assignable under this section for the rate year during which the violation or attempted violation occurred and the three years immediately following this rate year. However, if the person's business is already at the highest rate for any year, or if the amount of increase in the person's rate would be less than 2 percent for the year, then a penalty rate of contributions of 2 percent of taxable wages must be imposed for the year. (ii) If the person is not an employer, the person is subject to a civil money penalty of not more than $5,000. Any fine must be deposited in the penalty and interest account established under title 24 Virgin Islands Code, section 311a, subsection (a). (B) For purposes of this section, term “knowingly” means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved. (C) For purposes of this section, the term “violates or attempts to violate” includes, but is not limited to, intent to evade, misrepresent or nondisclosure. (D) In addition to the penalty imposed by paragraph (4), any violation of this section may be prosecuted as a felony pursuant to title 14 Virgin Islands Code, chapter 1, subchapter 1. (5) The Commissioner must establish procedures to identify the transfer or acquisition of a business for purposes of this section. (6) For purposes of this section: (A) “Person” has the meaning given such term by section 7701(a)(1) of the Internal Revenue Code of 1986, and (B) “Trade of business” includes the employer's workforce. (7) This section must be interpreted and applied in a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor. Contributions paid in error to a State  (j) Contributions due under this chapter with respect to wages for insured work shall for the purpose of this section be deemed to have been paid to the fund as of the date payment was made as contributions therefor under a state or Federal employment security law if payment into the fund of such contributions is made on such terms as the Commissioner finds will be fair and reasonable as to all affected interests. Payments to the fund under this subsection shall be deemed to be contributions for purposes of section 308 of this title. [Delinquent accounts]  (k) The Commissioner of Labor shall have the power and authority to prescribe criteria pursuant to which he may declare delinquent accounts uncollectible. Such criteria shall include, but need not be limited to, exhaustion of collection remedies specified in this chapter, failure for five years to discover assets of the delinquent employer which are subject to execution in the Virgin Islands, and the continuing liability of said employer for the amount of the delinquent account which remains in arrears.