Chap. 334.—An ACT to amend and re-enact Sections 6, 8, 13, and 14 of Chapter 1
of the Acts of the General Assembly of Virginia of 1936-1937, approved Decem-
ber 18, 1936, and known, designated and cited as the “Virginia Unemployment
Compensation Act,’’ said sections relating to benefits, claims for benefits, em-
ployers’ coverage, the unemployment compensation administration fund, taxes,
the collection of taxes and the authorization of certain refunds. [S B 114]

Approved March 29, 1940

1. Be it enacted by the General Assembly of Virginia, That
sections six, eight, thirteen and fourteen of chapter one of the Acts
of the General Assembly of Virginia of nineteen hundred and thirty-
six-nineteen hundred and thirty-seven, approved December eighteenth,
nineteen hundred and thirty-six, and known, designated and cited as
the “Virginia Unemployment Compensation Act,’’ be amended and
re-enacted so as to read as follows:

Section 6. Claims for benefits.—(a) Filing —Claims for benefits
shall be made in accordance with such regulations as the commission
may prescribe. Each employer shall post and maintain printed state-
ments of such regulations in places readily accessible to individuals
in his service and shall make available to each such individual at
the time he becomes unemployed, a printed statement of such regula-
tions. Such printed statements shall be supplied by the commission
to each employer without cost to him.

(b) Initial determination—A representative designated by the
commission, and hereinafter referred to as a deputy, shall promptly
examine the claim and, on the basis of the facts found by him, shall
either determine whether or not such claim is valid, and if valid, the
week with respect to which benefits shall commence, the weekly
benefit amount payable and the maximum duration thereof, or shall
refer such claim or any question involved therein to an appeal tribunal
or to the commission, which tribunal or commission shall make its
determination with respect thereto in accordance with the procedure
described in subsection (c) of this section, except that in any case in
which the payment or denial of benefits will be determined by the
provisions of section five (d) of this act, the deputy shall promptly
transmit his full finding of fact with respect to that subsection to the
commission, which, on the basis of the evidence submitted and such
additional evidence as it may require, shall affirm, modify, or set
aside such findings of fact and transmit to the deputy a decision upon
the issues involved under that subsection. The deputy shall promptly
notify the claimant, and in any claim involving the application of
section five of this act he shall also notify the most recent employer
of the claimant of the determination or decision and the reasons
therefor. Unless the claimant or any such interested party, within
five calendar days after the delivery of such notification, or within
seven calendar days after such notification was mailed to his last-
known address, files an appeal from such decision, such decision shall
be final and benefits shall be paid or denied in accordance therewith.
If an appeal is duly filed, benefits with respect to the period prior to
the final determination of the commission shall be paid only after
such determination; provided, that if an appeal tribunal affirms a
decision of a deputy, or the commission affirms a decision of an appeal
tribunal, allowing benefits, such benefits shall be paid regardless of
any appeal which may thereafter be taken.

(c) Appeals.—Unless such appeal from any initial determination
made by the Commission or by a deputy is withdrawn, an appeal
tribunal, after affording the parties reasonable opportunity for fair
hearing, shall affirm, set aside, reverse, or modify the findings of fact
and decision of the Commission or of the deputy. The parties shall
be duly notified of such tribunal’s decision, together with its reasons
therefor, which shall be deemed to be the final decision of the Com-
mission, unless within ten days after the date of notification or mailing
of such decision, further appeal is initiated pursuant to subsection (e)
of this section.

(d) Appeal tribunals—To hear and decide disputed claims,
the Commission shall establish one or more impartial appeal tribunals
consisting in each case of either a salaried examiner or a body con-
sisting of three members, one of whom shall be a salaried examiner,
who shall serve as chairman, one of whom shall be a representative
of employers and the other of whom shall be a representative of
employees; each of the latter two members shall serve at the pleasure
of the Commission and be paid a fee of not more than ten dollars per
day of active service on such tribunal plus necessary expenses. No
person shall participate on behalf of the Commission in any case in
which he is an interested party. The Commission may designate
alternates to serve in the absence or disqualification of any member
of an appeal tribunal. The chairman shall act alone in the absence
or disqualification of any other member and his alternates. In no case
shall the hearings proceed unless the chairman of the appeal tribunal
iS present.

(e) Commission review.—The commission may on its own
motion affirm, modify, or set aside any decision of an appeal tribunal
on the basis of the evidence previously submitted in such case, or
direct the taking of additional evidence, or shall permit any of the
parties to such decision to initiate further appeals before it. The
Commission shall permit such further appeal by any of the parties
interested in a decision of an appeal tribunal which is not unanimous
and by the deputy whose decision has been overruled or modified
by an appeal tribunal. The Commission may remove to itself or
transfer to another appeal tribunal the proceedings an any claim
pending before an appeal tribunal. Any proceeding so removed to
the Commission, or appealed from a decision of an appeal tribunal
shall be heard by a quorum thereof in accordance with the require-
ments in subsection (c) of this section. —The Commission shall promptly
notify the interested parties of its findings and decision.

Any decision of the Commission, upon a hearing on appeal, shall
become final ten days after the date of notification or mailing thereof,
and judicial review thereof shall be permitted the claimant or any
interested party claiming to be aggrieved thereby. The Commission
shall be deemed to be a party to any judicial action involving any
such decision, and shall be represented in any such judicial action by
the Attorney General.

({) Procedure-—The manner in which disputed claims shall be
presented, the reports thereon required from the claimant and from
employers, and the conduct of hearings and appeals before any
deputy, appeal tribunal or the Commission shall be in accordance
with regulations prescribed by the commission for determining the
rights of the parties, whether or not such regulations conform to
common law or statutory rules of evidence and other technical rules
of procedure. A full and complete record shall be kept of all proceed-
ings in connection with a disputed claim. All testimony at any
hearing upon a disputed claim shall be recorded, but need not be
transcribed unless the disputed claim is further appealed.

(gz) Witness fees.—Witness subpoenaed pursuant to this section
shall be allowed fees at a rate fixed by the Commission. Such fees
shall be deemed a part of the expense of administering this act.

(h) Judicial review.—Within ten days after the decision of the
Commission has become final, any party aggrieved thereby may
secure judicial review thereof by commencing an action in the circuit
court of the county or in the corporation or hustings court of the
city, or if the city has no corporation or hustings court, then in the
circuit court of the city, or if no circuit court, then in the circuit court
of the county in which such city is geographically located, in which
the individual who filed the claim was last employed, against the
Commission for the review of its decision, in which action any other
party to the proceedings before the Commission shall be made a
defendant. In such action, a petition which need not be verified,
but which shall state the grounds upon which a review is sought,
shall be served upon a member of the Commission or upon such per-
son as the commission may designate and such service shall be deemed
completed service on all parties, but there shall be left with the party
so served as many copies of the petition as there are defendants and
the Commission shall forthwith mail one such copy to each such
defendant. With its answer, the Commission shall certify and file
with said court all documents and papers and a transcript of all
testimony taken in the matter, together with its findings of fact and
decision therein. The Commission may also, in its discretion, certify
to such court questions of law involved in any decision by it. In
any judicial proceeding under this section, the findings of the Com-
mission as to the facts, if supported by evidence and in the absence
of fraud, shall be conclusive, and the jurisdiction of said court shall
be confined to questions of law. Such actions and the questions so
certified, shall be heard in a summary manner at the earliest possible
date. An appeal may be taken from the decision of such court to
the Supreme Court of Appeals, in conformity with general law gov-
erning appeals in equity cases. It shall not be necessary, in any pro-
ceeding under this section, to enter exceptions to the ruling of the
Commission or an appeal tribunal, and no bond shall be required
upon an appeal to any court. Upon the final determination of such
judicial proceeding, the Commission shall enter an order in accord-
ance with such determination. A petition for judicial review shall
operate as a supersedeas.

Section 8. Period, election, and termination of employer’s cover-
age.—(a) Any employing unit which is or becomes an employer
subject to this act within any calendar year shall be subject to this
act during the whole of such calendar year.

(b) Except as otherwise provided in this subsection and sub-
section (c) of this section, an employing unit shall cease to be an
employer subject to this act as of the first day of January of any
calendar year, only if it files with the Commission, prior to the second
day of February of such year, a written application for termination
of coverage, and the Commission finds that there were no twenty
different days, each day being in a different week within the preceding
calendar year, within which such employing unit employed eight or
more individuals in employment subject to this act. For the pur-
pose of this subsection, the two or more employing units mentioned
in paragraph (3) or (4) of section two (i) shall be treated as a single
employing unit. On and after January first nineteen hundred and
forty, the provisions of this subsection shall not apply to any.em-
ploying unit which is an organization exempt from income tax under
section one hundred and one of the Federal Internal Revenue Code.
Any employing unit which is an employer at the end of any calendar
year solely by acquisition (during said year) as provided in para-
eraph two of section two (i) shall cease to be an employer subject to
this act as of January first of the succeeding calendar year without
the filing of the written application required of all other employers,
provided the Commission finds that there were no twenty different
days, each day being in a different week within the preceding calendar
year, within which such employing unit and its predecessors in title
(treated as a single employing unit) employed eight or more indi-
viduals subject to this act.

(c) (1) An employing unit, not otherwise subject to this act,
which files with the Commission its written election to become an
employer subject hereto for not less than two calendar years, shall,
with the written approval of such election by the Commission, become
an employer subject hereto to the same extent as all other employers,
as of the date stated in such approval, and shall cease to be subject
hereto as of January first of any calendar year subsequent to such
two calendar years, only if prior to the second day of the next succeed-
ing February, it has filed with the Commission a written notice to
that effect.

(2) Any employing unit for which services that do not constitute
employment as defined in this act are performed, may file with the
Commission a written election that all such services performed by
individuals in its employ in one or more distinct establishments or
places of business shall be deemed to constitute employment for all
the purposes of this act for not less than two calendar years. Upon
the written approval of such election by the Commission, such services
shall be deemed to constitute employment subject to this act from and
after the date stated in such approval. Such services shall cease to be
deemed employment subject hereto as of January first of any calendar
year subsequent to two such calendar years, only if at least thirty
days prior to such first day of January such employing unit has filed
with the Commission a written notice to that effect.

Section 13. Unemployment Compensation Administration Fund.
—(a) There is hereby created in the State treasury a special fund to
be known as the Unemployment Compensation Administration Fund.
All moneys which are deposited or paid into this fund are hereby
appropriated and made available to the commission. All moneys in
this fund shall be expended solely for the purpose of defraying the
cost of the administration of this act and for no other purpose what-
soever. The fund shall consist of all moneys appropriated by this
State, and all moneys received from the United States of America,
or any agency thereof, including the Social Security Board, the Rail-
road Retirement Board, and the United States Employment Service,
or from any other source, for such purpose.

(a-1) All moneys received by the commission pursuant to the
provisions of section three hundred and two of Title III of the Social
Security Act, as amended, shall be expended solely for the purposes
and in the amounts found necessary by the Federal Social Security
Board for the proper and efficient administration of this act.

(a-2) Effective July first, nineteen hundred and forty-one, the
commission is authorized and directed to replace in the Unemploy-
ment Compensation Administration Fund, within a reasonable time,
out of any funds appropriated by the General Assembly for such
purpose, any moneys received by the commission pursuant to the
provisions of section three hundred and two of Title III of the Social
Security Act, as amended, which, because of any action or contingency,
are lost or are expended for purposes other than, or in amounts in
excess of those found necessary by the Federal Social Security Board
for the proper administration of this act. The Commission is directed
to report to the Governor in accordance with the provisions of section
twenty-five hundred and seventy-seven (a) of the Virginia Code the
amount necessary to make such replacement to the Unemployment
Compensation Administration Fund, and the Governor shall include
in the budget reported to the General Assembly and in the tentative
budget bill the amount necessary to be appropriated for such purposes.

(b) A special employment service account shall be maintained
as a part of the unemployment compensation administration fund
for the purpose of maintaining the public employment offices estab-
lished pursuant to section twelve of this act, and for the purpose of
cooperating with the United States Employment Service.

(c) For the purpose of paying the salaries and remuneration of
the members of the commission, and of the officers, agents and em-
ployees of the commission, and all costs and expenses incurred by the
commission in administering the provisions of this act until moneys
are received for such purpose from the United States or some officer
or agency thereof, there is hereby appropriated, from funds in the
State treasury not otherwise appropriated, the sum of ten thousand
dollars or so much thereof as shall be necessary. To reimburse the
State for the sum herein appropriated, or so much thereof as shall be
expended, there shall be deducted from moneys received by the
commission, before the end of the fiscal year ending June thirtieth,
nineteen hundred and thirty-eight, from the United States under
Title III of the Social Security Act the sum of ten thousand dollars,
or such part thereof as shall be expended hereunder, which sum shall
be credited to the general fund of the State treasury.

(d) All payments and disbursements from the unemployment
compensation administration fund shall be made by the State Treasurer
upon warrants of the Comptroller issued upon vouchers signed by
some member of the commission designated by the commission for
such purpose, or by such other person or persons as the commission
may designate for such purpose.

(e) All expenses incurred by the Auditor of Public Accounts in
auditing the books, records and accounts of the commission and in
rendering other services to the commission and all expenses incurred
by the Comptroller and the State Treasurer in performing the services
required by this act, may be treated as administrative expense of the
commission and accordingly paid by the commission.

Section 14. Collection of contributions.—(a) Interest on past-
due contributions.—Contributions unpaid on the date on which they
are due and payable, as prescribed by the commission pursuant to
the provisions of section seven, 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 the commission. Interest collected
pursuant to this subsection shall be paid into the unemployment
compensation fund.

(b) Collection.—If, after due notice, any employer defaults in
any payment of contributions or interest thereon, the amount due
shall be collected by civil action in the name of the Commission, 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 by the court at the
earliest possible date. In addition to the foregoing remedy the com-
mission shall have such other remedies as are available to the State
Tax Commissioner and county and city treasurers for the collection
of taxes generally. The Commission is hereby authorized to compro-
mise, settle and adjust any tax or taxes assessed against any employer
where in the judgment of the Commission the best interests of the
Commonwealth of Virginia will be promoted or served thereby and
may in such cases accept in full settlement of the tax assessed an
amount less than that assessed.

(c) Priorities under legal dissolutions or distributions—In the
event of any distribution of any employer's assets, contributions
then or thereafter due shall be paramount and prior to all claims of
lien and general creditors, except claims given higher dignity by Fed-
eral law. Nothing in this section shall be construed in derogation of
any lien of the Commonwealth or any of its political subdivisions
now existing or hereafter created by law; nor shall anything herein
be construed to affect the laws now in force with regard to marshalling
a decedent’s estate and in regard to the exemption of a poor debtor;
nor shall anything herein be construed to affect the priority of any
mortgage, deed of trust or other lien duly perfected prior to the date
the contributions or any part thereof first accrued.

(1) The contributions or tax imposed by section seven and
sub-sections thereunder, of this act shall be a lien upon the assets of
the business of any employer subject to the provisions hereof who
shall lease, transfer or sell out his business, or shall cease to do business
and such employer shall be required by the next reporting date as
prescribed by the commission, to file with the commission all reports
and.pay all contributions due with respect to wages payable for em-
ployment up to the date of such lease, transfer, sale or cessation of
the business and such employer’s successor in business shall be re-
quired. to withhold sufficient of the purchase money to cover the
amount of said contributions due and unpaid until such time as the
former owner or employer shall produce a receipt from the com-
mission showing that the contributions have been paid, or a certificate
that no contributions are due. If the purchaser of a business or a
successor of such employer shall fail to withhold purchase money or
any money due to such employer in consideration of a lease or other
transfer and the contributions shall be due and unpaid after the next
reporting date, as above set forth, such successor shall be personally
liable to the extent of the assets of the business so acquired for the
payment of the contributions accrued and unpaid on account of the
operation of the business by the former owner or employer. Whenever
the purchaser or successor of such employer shall file with the Com-
mission a written request for a statement showing the amount of tax,
if any, due by such employer, unless such statement is furnished to
such purchaser or successor of such employer within ninety days from
the date such written request was filed, such purchaser or successor
shall not be liable for any tax or taxes due by such employer, and the
lien created by this. sub-section shall thereupon be released and dis-
charged.
(d) Refund.—lIf not later than one year after the date on which
any contributions or interest thereon are paid, an employing unit
which has paid such contributions or interest thereon shall make
application for adjustment thereof in connection with subsequent
contribution payments, or for a refund thereof because such
adjustment cannot be made, and the commission shall determine
that such contributions or interest or any portion thereof was er-
roneously collected, the commission shall allow such employing unit
to make an adjustment thereof, without interest, in connection with
subsequent contribution payments by him, or if such adjustment
cannot be made the commission shall refund said amount, without
interest, from the fund. For like cause and within the same period,
adjustment or refund may be so made on the commissions’ own in-
itiative.

(1) Any employing unit which the commission finds has er-
roneously paid prior to January first, nineteen hundred and forty such
contributions or interest for the calendar year nineteen hundred and
thirty-six, nineteen hundred and thirty-seven, or nineteen hundred
and thirty-eight, applying for refund or adjustment before the SIX-
tieth day after the effective date of this amendment, shall, without
regard to the due date thereof, be entitled to a refund or adjustment
thereof, without interest, from the fund.

(2) In any case where the commission finds that any employing
unit has erroneously paid to this State contributions or interest upon
wages earned by individuals in employment in another state, re-
fund or adjustment thereof shall be made, without interest, and
without regard to the due date thereof, upon satisfactory proof to
the commission that payment of such contributions and interest has
been made to such other state.

(3) In any case where the commission finds that an instrumen-
tality of the United States has paid to this State contributions or
interest upon wages for any year with respect to which this State is
not certified by the Social Security Board under section sixteen
hundred and three of the Federal Internal Revenue Code, refund
thereof shall be made to such instrumentality, without interest, and
without regard to the date of payment.