Chapter DWD 115

Register June 2007 No. 618

Chapter DWD 115

BUSINESS TRANSFERS

DWD 115.001   Definitions.

DWD 115.01   Business transfer; methods used in business transfers and in the ordinary course of business; transfer of an asset; transfer of a business activity; total or partial transfer.

DWD 115.02   Determining date of transfer.

DWD 115.03   Notice to the department of a business transfer; required information to submit; department’s investigative powers; resolution of issues.

DWD 115.04   Transferee as successor; non-successor transferee.

DWD 115.05   Mandatory successor.

DWD 115.06   Transfers involving fiduciaries.

DWD 115.07   Optional successor.

DWD 115.08   Owned, managed, or controlled in substantial part; the same interest or interests; employed substantially the same employees.

DWD 115.09   Determining transfer percentage; minimum transfer percentage; estimating transfer percentage; applying transfer percentage.

DWD 115.10   Effects of successorship.

DWD 115.11   Non-successor transferee.

Ch. DWD 115 Note Note: Chapter Ind-UC 115 was renumbered to be chapter ILHR 115 under s. 13.93 (2m) (b) 1. and 2., Register, August, 1987, No. 380; chapter ILHR 115 as it existed on January 31, 1992 was repealed and a new chapter ILHR 115 was created effective February 1, 1992. Chapter ILHR 115 was renumbered Chapter DWD 115 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, June, 1997, No. 498.

DWD 115.001 DWD 115.001 Definitions.

DWD 115.001(1) (1) In general. Except as provided in sub. (2), unless the context clearly indicates a different meaning, the definitions in ch. DWD 100 apply to this chapter.

DWD 115.001(2) (2) In this chapter:

DWD 115.001(2)(b) (b) “Transferee” means the person to whom an asset or business activity is transferred, whether or not that person is an employer before the transfer.

DWD 115.001(2)(c) (c) “Transferor” means an employer which transfers an asset or business activity.

DWD 115.001(2)(d) (d) “Transfer percentage” means the percent of the transferor’s total payroll for a recent and representative period preceding the transfer date, which is properly assignable to the transferred business. The recent and representative period shall be the 4 most recently completed calendar quarters preceding the transfer date, except that the period may be expanded to include the partial quarter immediately preceding the transfer if the transfer date did not fall on a quarter ending date and there was no payroll assignable to the transferred portion of the business in the 4 most recently completed quarters.

DWD 115.001 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92, r. (intro.), (3), (5) to (7), renum. (1), (2), (8), (11) and (12) to be 100.02 (4), (7), (43), (64) and (65), renum. (9) and (10) to be 100.02 (60) and (63) and am., renum. (4) to be (2) and am., cr. (1), Register, September, 1995, No. 477, eff. 10-1-95; CR 18-033: renum. (2) to (2) (intro.) and am., (a) renum. from 100.02 (63) and am., (b) renum. from 100.02 (64), (c) renum. from 100.02 (65) Register May 2019 No. 761, eff. 6-1-19; correction in (2) made under s. 13.92 (4) (b) 1., Stats., Register May 2019 No. 761.

DWD 115.01 DWD 115.01 Business transfer; methods used in business transfers and in the ordinary course of business; transfer of an asset; transfer of a business activity; total or partial transfer.

DWD 115.01(1) (1) Business transfer. Under s. 108.16 (8) (a), Stats., a transfer of business occurs when any asset or business activity is transferred in whole or in part by a transferor to a transferee by any method other than in the ordinary course of business.

DWD 115.01(2) (2) Methods used in business transfers. Methods of transferring assets or business activities include gift, sale, lease, inheritance, foreclosure, termination or cancellation of lease, bankruptcy sale, reorganization, merger or consolidation and receivership.

DWD 115.01(3) (3) Events which are not business transfers. Corporate name changes, the election or cancellation of subchapter S status under section 1362 of the internal revenue code by a corporation, the transfer of payroll function only and the transfer of employees between an employee service company and its clients or customers are not transfers of a business. The transfer of shares of corporate stock by a stockholder is not a transfer of business for the corporation which issued the shares. Sale of used equipment or furniture and fixtures which are being replaced or no longer being used are considered transfers in the ordinary course of business rather than business transfers under ch. 108, Stats.

DWD 115.01(4) (4) Transfer of an asset. An asset is transferred if ownership, possession or use changes from the transferor to the transferee.

DWD 115.01(5) (5) Transfer of a business activity. For a transfer of a business activity to be a business transfer under this section and s. 108.16 (8) (a), Stats., the business activity after the transfer shall be similar to the business activity before the transfer. In determining whether a business activity has been transferred, continued or resumed, the department shall consider factors which suggest a similarity in business activity including any of the following:

DWD 115.01(5)(a) (a) The existence of the same customers or the same type of customer after the transfer.

DWD 115.01(5)(b) (b) The closeness of the transferee’s business location to that of the transferor when location is important to the business.

DWD 115.01(5)(c) (c) The continued use of the transferor’s trade name by the transferee.

DWD 115.01(5)(d) (d) A lapse in operation of 6 months or less unless extensive remodeling is involved or the business is seasonal in nature but in no event shall the lapse be considered if greater than 2 years.

DWD 115.01(5)(e) (e) Few if any changes in the product or in brand names after the transfer.

DWD 115.01(5)(f) (f) The similarity in days and hours of the business under both the transferor and transferee.

DWD 115.01(5)(g) (g) The transfer of inventory, expensive plant machinery, heavy equipment or unique assets as opposed to general office furniture and fixtures.

DWD 115.01(5)(h) (h) The transfer of key employees or employees with highly technical professional skills.

DWD 115.01(5)(i) (i) The transfer of goodwill.

DWD 115.01(5)(j) (j) The existence of a noncompetition clause in the contract prohibiting the transferor from engaging in the same kind of business activity in the area.

DWD 115.01(5)(k) (k) The transfer of a license or a franchise.

DWD 115.01(6) (6) Total or partial transfer. The transfer of a business may be a total transfer or a partial transfer. If only a portion of a business is transferred, the department shall compute and apply the transfer percentage under s. DWD 115.09.

DWD 115.01 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 18-033: am. (5) (intro.), (a) to (j), (6) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.02 DWD 115.02 Determining date of transfer. The effective date of a transfer of business shall be the date on which the transferee first has actual operating control over business assets and business activities. In determining the effective date of a transfer of business, the department shall consider all of the following:

DWD 115.02(1) (1) Legal documents related to the transfer.

DWD 115.02(2) (2) Any statements or documents tending to show that actual operating control was transferred on a date earlier than that reflected in legal documents related to the transfer.

DWD 115.02(3) (3) Any other relevant evidence.

DWD 115.02 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 18-033: am. (intro.), (1), (2) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.03 DWD 115.03 Notice to the department of a business transfer; required information to submit; department’s investigative powers; resolution of issues.

DWD 115.03(1) (1) Any time a business is transferred under s. DWD 115.01, the transferor and transferee shall notify the department in writing within 30 days after the date of transfer under s. 108.16 (8) (k), Stats.

DWD 115.03(2) (2) The transferor and transferee shall submit in writing any information requested by the department relating to the transfer, or to any transaction that may be a transfer. The department shall determine if the transaction is a transfer of business and if the transaction is a total or partial transfer under this chapter and ch. 108, Stats.

DWD 115.03(3) (3) The department may use any other relevant information, however obtained, in order to make a determination regarding a business transfer under this section. Under ss. 108.14 (2) and (2m) and 108.21, Stats., the department may, at any reasonable time, inspect the work records and any other records of an employing unit, or of any entity which the department has reason to believe may be an employing unit, which may show payments for personal services so that the department may determine the status and contribution liability of the employing unit or entity under ch. 108, Stats.

DWD 115.03(4) (4) The department may issue determinations, computations, recomputations and appeal tribunal decisions as necessary under ss. 108.09, 108.095, and 108.10, Stats., in connection with any issue arising under this chapter.

DWD 115.03 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 18-033: am. (2), (4) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.04 DWD 115.04 Transferee as successor; non-successor transferee.

DWD 115.04(1) (1) Standard for successor. The transferee becomes a successor under s. 108.16 (8), Stats., if all of the following apply:

DWD 115.04(1)(a) (a) A transfer of business has occurred under s. DWD 115.01.

DWD 115.04(1)(b) (b) The department determines that the transferee is a successor under ss. DWD 115.05 to 115.07.

DWD 115.04(2) (2) Non-successor transferee. If the transferee is not a successor under sub. (1), s. DWD 115.11 applies.

DWD 115.04 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92;.CR 18-033: am. (1) (intro.), (a), (b) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.05 DWD 115.05 Mandatory successor. The department shall determine that a transferee is a mandatory successor under s. 108.16 (8) (e), Stats., if the business transfer satisfies s. DWD 115.01 and all of the following apply:

DWD 115.05(1) (1) At the time of business transfer, the transferor and the transferee are owned, managed, or controlled in whole or in substantial part under s. DWD 115.08, either directly or indirectly by legally enforceable means or otherwise, by the same interest or interests under s. DWD 115.08.

DWD 115.05(2) (2) The transferee has continued or resumed the business of the transferor either in the same establishment or elsewhere, or the transferee has employed substantially the same employees under s. DWD 115.08 as those the transferor had employed in connection with the business transferred.

DWD 115.05(3) (3) The same financing provisions under s. 108.15, 108.151, 108.152, or 108.18, Stats., apply to the transferee as applied to the transferor on the date of the transfer.

DWD 115.05 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 18-033: am. (intro.), (1) to (3) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.06 DWD 115.06 Transfers involving fiduciaries.

DWD 115.06(1) (1) Transfer to a fiduciary. The department shall find that a transferee is a mandatory successor under s. 108.16 (8) (c), Stats., if all of the following apply:

DWD 115.06(1)(a) (a) The transferee is a legal representative, trustee in bankruptcy or a receiver or trustee of a person, partnership, limited liability company, association or corporation, or a guardian of the estate of a person, or legal representative of a deceased person.

DWD 115.06(1)(b) (b) The transferee has continued or resumed the business of the transferor, either in the same establishment or elsewhere, or the transferee has employed substantially the same employees under s. DWD 115.08 as those the transferor had employed in connection with the business transferred.

DWD 115.06(1)(c) (c) The same financing provisions under s. 108.15, 108.151, 108.152 or 108.18, Stats., apply to the transferee as applied to the transferor on the date of the transfer.

DWD 115.06(2) (2) Transfer from a fiduciary. If the business of a successor employer specified in sub. (1) is transferred, the transferee is deemed a successor under s. 108.16 (8) (d), Stats., if the transferee would have been a successor under s. DWD 115.04 except for the intervening existence of the successor employer under sub. (1).

DWD 115.06 History History: Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 18-033: am. (1) Register May 2019 No. 761, eff. 6-1-19.

DWD 115.07 DWD 115.07 Optional successor.

DWD 115.07(1) (1) Standard. A transferee may elect to become a successor under s. 108.16 (8) (b), Stats., if the business transfer satisfies s. DWD 115.01 and all of the following apply:

DWD 115.07(1)(a) (a) The transfer included at least a transfer percentage of 25% of the transferor’s total business as determined under s. DWD 115.09.

DWD 115.07(1)(b) (b) The same financing provisions under s. 108.15, 108.151, 108.152 or 108.18, Stats., apply to the transferee as applied to the transferor on the date of the transfer.

DWD 115.07(1)(c) (c) The transferee has continued or resumed the business of the transferor either in the same establishment or elsewhere, or the transferee has employed substantially the same employees under s. DWD 115.08 as those the transferor had employed in connection with the business transferred.

DWD 115.07(1)(d) (d) The department received a timely written application from the transferee requesting successorship status.

DWD 115.07(2) (2) Written application; timely receipt; withdrawal.