A.R.S. tit. 23 ch. 4 — Arizona Revised Statutes Title 23 Chapter 4 — Employment Security

23-601. Declaration of policy As a guide to the interpretation and application of this chapter, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and his family. The achievement of social security requires protection against this greatest hazard of economic life. This can be provided by encouraging employers to provide more stable employment and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing power and limiting the serious social consequences of poor relief assistance. The legislature, therefore, declares that in its considered judgment the public good and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own. 23-602. Definitions of words and phrases The definitions of words and phrases set forth in this article shall apply throughout this chapter unless the context otherwise requires. 23-603. Agricultural labor; definitions; exemption A. "Agricultural labor" means and includes all service performed prior to January 1, 1972, that was agricultural labor as defined in this section prior to that date, and that remunerated service performed after December 31, 1971: 1. On a farm, in the employ of any person, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training and management of livestock, bees, poultry, and fur-bearing animals and wildlife. 2. In the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation, improvement or maintenance of the farm and its tools and equipment or in salvaging timber or clearing land of brush and other debris left by a hurricane, if the major part of the service is performed on a farm. 3. In connection with the production or harvesting of any commodity defined as an agricultural commodity in section 15(g) of the agricultural marketing act, as amended (46 Stat. 1550, sec. 3; 12 United States Code section 1141j), or in connection with the ginning of cotton or in connection with the operation or maintenance of ditches, canals, reservoirs or waterways, not owned or operated for profit, used exclusively for supplying and storing water for farming purposes. 4. In the employ of the operator of a farm in handling, planting, drying, packing, packaging, processing, freezing, grading, storing or delivering to storage or to market, or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity, but only if the operator produced more than one-half of the commodity with respect to which the service is performed and only if the service is performed as an incident to ordinary farming operations or, in the case of fruits and vegetables, as an incident to the preparation of the fruits or vegetables for market. 5. In the employ of a group of operators of farms, or a cooperative organization of which the operators are members, in the performance of service described in paragraph 4 of this subsection, but only if the operators produced more than one-half of the commodity with respect to which the service is performed. 6. On a farm operated for profit if the service is not in the course of the employer's trade or business. B. For the purposes of this section, "farm" includes stock, dairy, poultry, fruit, fur-bearing animal and truck farms and plantations, ranches, nurseries, ranges, greenhouses or other similar structures that are used primarily for raising agricultural or horticultural commodities, including orchards. C. Notwithstanding section 23-617, paragraph 1, service as prescribed by subsection A of this section that is performed after December 31, 1977, by an individual who is an alien admitted to the United States to perform agricultural labor pursuant to sections 214(c) and 101(a)(15)(H) of the immigration and nationality act is exempt employment during any period in which it does not meet the definition of employment in section 23-615, subsection A, paragraph 10. D. Subsection A, paragraphs 4 and 5 of this section do not apply to service performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption. 23-603.01. American employer "American employer" means a person who is an individual who is a resident of the United States; a partnership, if two-thirds or more of the partners are residents of the United States; a trust if all of the trustees are residents of the United States; or a corporation organized under the laws of the United States or of any state. 23-604. Annual payroll and average annual payroll A. "Annual payroll" means the total amount of wages for employment paid by an employer during a twelve-month period ending on June 30 of any calendar year. B. In computing an employer's contribution rate, "average annual payroll" means: 1. The annual payroll for the twelve-month period immediately preceding the computation date for an employer whose account has been chargeable with benefits for twelve but less than twenty-four months. 2. The average of the annual payrolls for the last two twelve-month periods immediately preceding the computation date for an employer whose account has been chargeable with benefits for twenty-four but less than thirty-six months. 3. The average of the annual payrolls for the last three twelve-month periods immediately preceding the computation date for an employer whose account has been chargeable with benefits for thirty-six or more months. C. "Computation date" means July 1 of each calendar year with respect to rates of contribution applicable to the calendar year beginning with the following January 1. 23-605. Base period "Base period" means the first four of the last five completed calendar quarters immediately preceding the first day of an individual's benefit year, except that the base period of an individual whose new benefit year overlaps his last preceding benefit year shall consist of those four completed calendar quarters immediately following his previous base period. 23-606. Base-period employers "Base-period employers" means the employers by whom an individual was paid base-period wages. 23-607. Base-period wages "Base-period wages" means the wages paid to an individual during his base period for insured work. 23-608. Benefits "Benefits" means the money payments payable to an individual as provided in this chapter, with respect to his unemployment. 23-609. Benefit year "Benefit year" with respect to an individual means the one-year period beginning with the first day of the first week of unemployment with respect to which the individual first files a claim in accordance with section 23-772 and thereafter the one-year period beginning with the first day of the first week of unemployment with respect to which the individual next files a claim after the termination of his last preceding benefit year, provided that at the time of filing the claim the individual has been paid the wages for insured work required under section 23-771. For the purposes of this section a week with respect to which an individual files a valid claim establishing a benefit year shall be deemed to be in that benefit year which includes the greater part of such week. 23-609.01. Hearing officers "Hearing officer" means a hearing officer of the department of economic security. 23-610. Calendar quarter "Calendar quarter" means the period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31, or the equivalent thereof as the commission may by regulation prescribe. 23-611. Definition "Commission" or "employment security commission" or "department" means the department of economic security. 23-612. Contributions "Contributions" means the money payments required by this chapter to be made into the state unemployment compensation fund by an employing unit on account of having individuals in its employ. 23-612.01. Crew leader A. "Crew leader" means an individual who does all of the following: 1. Furnishes individuals to perform agricultural labor for any other person or employing unit. 2. Pays (either on his behalf or on behalf of such other person or employing unit) the individuals furnished by him for the agricultural labor performed by them. 3. Has not entered into a written agreement with such other person or employing unit under which such individual is designated as an employee of such other person or employing unit. B. Any individual who is a member of a crew furnished by a crew leader to perform agricultural labor for any other person or employing unit shall be treated as an employee of such crew leader if such individual's services do not constitute employment for such other person or employing unit pursuant to any other provision of this chapter and either: 1. Such crew leader holds a valid certificate of registration under the migrant and seasonal agricultural worker protection act. 2. Substantially all the members of such crew operate or maintain tractors, mechanized harvesting or crop-dusting equipment, or any other mechanized equipment, which is provided by such crew leader. C. In the case of any individual who is furnished by a crew leader to perform agricultural labor for any other person or employing unit and who is not treated as an employee of such crew leader under subsection B both of the following apply: 1. Such other person or employing unit and not the crew leader shall be treated as the employer of such individual. 2. Such other person or employing unit shall be treated as having paid cash remuneration to such individual in an amount equal to the amount of cash remuneration paid to such individual by the crew leader (either on his behalf or on behalf of such other person or employing unit) for the agricultural labor performed for such other person or employing unit. 23-613. Employer A. "Employer" means: 1. Any employing unit which, within the calendar year 1941 or within any succeeding calendar year through 1971, for some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, has or had in employment three or more individuals irrespective of whether the same individuals are or were employed in each day. 2. Any employing unit: (a) That after December 31, 1971 for some portion of a day in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, has or had in employment at least one individual irrespective of whether the same individual was in employment in each day. (b) That after December 31, 1971 in any calendar quarter in either the current or preceding calendar year, paid for service in employment wages of one thousand five hundred dollars or more. (c) For which service in employment, as defined in section 23-615, subsection A, paragraph 6, 7 or 8 or section 23-615.01 is performed after December 31, 1977. For purposes of this paragraph, there shall not be taken into account any wages paid to, or employment of, an employee performing domestic services referred to in subsection C of this section. If an employing unit is determined an employer under subsection B of this section, the employing unit shall be determined an employer for the purposes of this paragraph. 3. Any individual or employing unit that acquired the organization, trade or business or substantially all the assets thereof, of another employing unit that at the time of acquisition was an employer subject to this chapter, or that acquired a part of the organization, trade or business of another employing unit that at the time of acquisition was an employer subject to this chapter provided the employing unit would have been an employer under this subsection if that part had constituted its entire organization, trade or business. 4. Any individual or employing unit that acquired the organization, trade or business, or substantially all the assets of the individual or employing unit, of another employing unit if either: (a) The employment record of the individual or employing unit subsequent to the acquisition, together with the employment record of the acquired unit before the acquisition, both within the same calendar year, would be sufficient to constitute an employing unit an employer subject to this chapter under this section. (b) The wages paid by the individual or employing unit subsequent to the acquisition, together with the wages paid by the acquired unit before the acquisition, both within the same calendar quarter, would be sufficient to constitute an employing unit an employer subject to this chapter under this section. 5. Any employing unit which, together with one or more other employing units, is owned or controlled by legally enforceable means or otherwise, directly or indirectly by the same interests, or that owns or controls by legally enforceable means or otherwise one or more other employing units, and that if treated as a single unit with the other employing units or interests, or both, would be an employer under this section. 6. Any employing unit that is not an employer by reason of any other paragraph of this subsection for which, within either the current or preceding calendar year, services in employment are or were performed with respect to which the employing unit is liable for any federal tax against which credit may be taken for contributions required to be paid into a state unemployment compensation fund, or which, as a condition for approval of this chapter for full tax credit against the tax imposed by the federal unemployment tax act, is required, pursuant to the act, to be an employer under this chapter. 7. Any employing unit which, having become an employer under this section has not, under section 23-725, ceased to be an employer subject to this chapter. 8. For the effective period of its election pursuant to section 23-725, any other employing unit that has elected to become subject to this chapter. B. In the case of agricultural labor, the term "employer" means any employing unit that after December 31, 1977: 1. For some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, employed in agricultural labor at least ten individuals irrespective of whether the same individuals were employed in each day. 2. In any calendar quarter in either the current or preceding calendar year paid cash wages of twenty thousand dollars or more for agricultural labor. C. In the case of domestic service in a private home, local college club, or local chapter of a college fraternity or sorority, the term "employer" means any employing unit, which after December 31, 1977, in any calendar quarter in either the current or preceding calendar year paid cash wages of one thousand dollars or more to individuals employed in that service. An employing unit, treated as an employer under this subsection shall not be treated as an employer with respect to wages paid for any other service unless the employing unit is treated as an employer under subsection A or B of this section with respect to the other service. D. For purposes of this section, if any week includes both December 31 and January 1, the days up to January 1 shall be deemed one calendar week and the days beginning January 1 another week. 23-613.01. Employee; definition; exempt employment A. "Employee" means any individual who performs services for an employing unit and who is subject to the direction, rule or control of the employing unit as to both the method of performing or executing the services and the result to be effected or accomplished. Indications of control by the employing unit include controlling the individual's hours of work, location of work, right to perform services for others, tools, equipment, materials, expenses and use of other workers and other indicia of employment, except employee does not include: 1. An individual who performs services as an independent contractor, business person, agent or consultant, or in a capacity characteristic of an independent profession, trade, skill or occupation. 2. An individual subject to the direction, rule or control or subject to the right of direction, rule or control of an employing unit solely because of a law regulating the organization, trade or business of the employing unit. 3. An individual or class of individuals that the federal government has decided not to and does not treat as an employee or employees for federal unemployment tax purposes, as established by the outcome of an audit or other affirmative treatment by the internal revenue service of any taxpayer whose tax returns include income from the independent contractor relationship. 4. An individual if the employing unit demonstrates the individual performs services in the same manner as a similarly situated class of individuals that the federal government has decided not to and does not treat as an employee or employees for federal unemployment tax purposes. 5. An individual to whom all of the following apply: (a) Performs officiating services in recreational, interscholastic or intercollegiate sporting events or contests on a contest-by-contest basis. (b) Has the ability to accept or reject assignments to officiate a sporting event or contest. (c) Has the right to officiate contests for multiple organizations or entities. (d) Is not otherwise employed by the sponsoring school, association of schools or the organization, this state, or a political subdivision of this state sponsoring the sporting event or contest. 6. A medical or health care professional who contracts with a medical practice group or hospital, whether directly or through an agent, and who is characterized by all of the following: (a) Observes the practices commonly associated with operating as a medical or professional entity, such as a professional corporation, a limited liability company or a contractor, and uses the practices of those entities for compensation, billing for services and filing tax returns. (b) Is not paid wages and does not have wage withholdings from the contracted medical practice group or hospital. (c) Is not provided employee benefits by the contracted medical practice group or hospital. 7. A home care services provider that contracts with a person other than as an employee, whether directly or through an agent, to furnish nonmedical therapeutic and restorative health-related or life assistance services, except behavioral health services, such as general supervision, protective, preventative and personal care, activities and living skills training, meals, housekeeping, companionship and health monitoring at the location where the recipient resides. B. For the purposes of subsection A, paragraph 5 of this section, "officiating services" means overseeing the play of a sporting event or contest, judging whether the rules are being followed and penalizing participants for infringing the rules. C. Notwithstanding this section, an individual or class of individuals shall not be treated as an employee by the department for purposes of this chapter if, before the department's determination that the individual or class of individuals at issue is an employee: 1. The individual or class of individuals had been performing services for the employing unit. 2. The department had inspected work records of the employing unit for time periods that the individual or class of individuals had been performing these services. 3. The individual or class of individuals at issue was not included on the contribution and wage reports of the employing unit. 4. After its inspection the department concluded in writing provided to the employing unit that either: (a) No change or changes in the inspected reports were necessary. (b) The individual or class of individuals in question did not constitute an employee for purposes of this chapter. 5. At no time between the date of the written determination prescribed in paragraph 4 of this subsection, and the department's subsequent conclusion that the individual or class of individuals at issue constitutes an employee, did the department notify the employing unit in writing that the individual or class of individuals at issue now constitutes an employee for purposes of this chapter. D. Subsection C of this section does not apply if either: 1. There has been a substantial and material change in the facts on which the writing required by subsection C, paragraph 4 of this section was based. 2. The conclusion reached by the department pursuant to subsection C, paragraph 4 of this section was the result of false statements, misrepresentation, fraud or intimidation on the part of the employing unit. E. The following services are exempt employment under this chapter, unless there is evidence of direction, rule or control sufficient to satisfy the definition of an employee under subsection A of this section, which is distinct from any evidence of direction, rule or control related to or associated with establishing the nature or circumstances of the services considered pursuant to this subsection: 1. Services that are not a part or process of the organization, trade or business of an employing unit and that are performed by an individual who is not treated by the employing unit in a manner generally characteristic of the treatment of employees. 2. Services performed by an individual for an employing unit or its clients through isolated or occasional transactions, regardless of whether the services are a part or process of the organization, trade or business of the employing unit. F. Notwithstanding this section, an individual or class of individuals determined to be an employee or employees for purposes of the federal unemployment tax act, as amended (26 United States Code sections 3301 through 3311), are employees under this chapter. G. Notwithstanding any other provision of this chapter, this section applies to an employing unit to which the provisions of section 23-750 apply only to the extent not inconsistent with the requirements of 26 United States Code sections 3304 (a)(6) and 3309. H. For the purposes of determining employee status, the department shall consider all of the employment-related facts and may not base a determination on the facts that: 1. The individual performs services as a sole proprietorship. 2. The individual has executed a restrictive covenant, trade secret agreement or other confidentiality agreement with the employing unit. 3. The services of the individual are subject to standards for quality, time or location required by a client or customer of the putative employing unit. 23-614. Employing unit; temporary services employer; professional employer organization; definitions A. "Employing unit" means an individual or type of organization, including a partnership, association, trust, estate, joint-stock company, insurance company or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee or successor of any of the foregoing, or the legal representative of a deceased person, which has, or after January 1, 1936 had, one or more individuals performing services for it within this state. Employing unit includes any federal instrumentality that is not wholly or partially owned by the United States and that has one or more individuals performing services for it within this state. B. Each individual who performs services in this state for an employing unit that maintains two or more separate establishments in this state is performing services for a single employing unit for all the purposes of this chapter. C. Each individual employed to perform or to assist in performing the work of any person in the service of an employing unit is engaged by the employing unit for all the purposes of this chapter, whether the individual was hired or paid directly by the employing unit or by the person, if the employing unit had actual or constructive knowledge of the work. Notwithstanding any other provision of this chapter except for section 23-612.01, an individual who performs services in or for a particular employing unit is not in the employment of that employing unit if the individual's wages for services in or for the particular employing unit are paid by another employing unit, and if the contributions required by this chapter on the wages are paid by the other employing unit. D. Notwithstanding any other provision of this chapter, whether an individual or entity is the employer of specific employees shall be determined by section 23-613.01, except as provided in subsections E and G of this section with respect to a professional employer organization or a temporary services employer. The exceptions to the definition of employee prescribed in section 23-613.01, subsection A apply to determinations made pursuant to subsections E, F, G and H of this section. E. A professional employer organization or a temporary services employer that contracts to supply a worker to perform services for a customer or client is the employer of the worker who performs the services. A customer or client who contracts with an individual or entity that is not a professional employer organization or a temporary services employer to engage a worker to perform services is the employer of the worker who performs the services. Except as provided in subsection F of this section, an individual or entity that is not a professional employer organization or a temporary services employer, that contracts to supply a worker to perform services to a customer or client and that pays remuneration to the worker acts as the agent of the employer for purposes of payment of remuneration. F. In circumstances that are in essence a loan of an employee to another employer and the direction and control of the manner and means of performing the services changes to the employer to whom the employee is loaned, the loaning employer continues to be the employer of the employee if the loaning employer continues to pay remuneration to the employee, whether or not the loaning employer is reimbursed by the other employer. If the employer to whom the employee is loaned pays remuneration to the employee for the services performed, that employer is considered the employer for the purposes of any remuneration paid to the employee by the employer, regardless of whether the loaning employer also pays remuneration to the employee. G. A professional employer organization shall report and pay all required contributions to the unemployment compensation fund using the state employer account number and the contribution rate of the professional employer organization. H. On termination of a contract between a professional employer organization and a client or the failure by a professional employer organization to submit reports or make tax payments as required by this chapter, the client shall be treated as a new employer without a previous experience record if the client has been subject to a professional employer agreement for at least two years or if the client is not otherwise eligible for an experience rating. I. For the purposes of this section: 1. "Professional employer organization" has the same meaning prescribed in section 23-561. 2. "Temporary services employer" means an employing unit that contracts with clients or customers to supply workers to perform services in more than one industry for the client or customer and that performs all of the following: (a) Negotiates with clients or customers for such matters as the time of work, the place of work, the type of work, the working conditions, the quality of services and the price of services. (b) Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments. (c) Retains the authority to assign or reassign a worker to other clients or customers if a worker is determined unacceptable by a specific client or customer. (d) Assigns or reassigns the worker to perform services for a client or customer. (e) Sets the rate of pay of the worker, whether or not through negotiation. (f) Pays the worker from its own account or accounts. (g) Retains the right to hire and terminate workers. 23-615. Employment; definition A. "Employment" means any service of whatever nature performed by an employee for the person employing the employee, including service in interstate commerce, and includes: 1. An individual's entire service performed within or both within and outside this state if: (a) The service is localized in this state. (b) The service is not localized in any state but some of the service is performed in this state and either: (i) The individual's base of operations, or, if there is no base of operations, then the place from which the service is directed or controlled is located in this state. (ii) The individual's base of operations or place from which the service is directed or controlled is not located in any state in which some part of the service is performed but the individual's residence is in this state. Service is deemed localized within a state if the service is performed entirely within that state, or the service is performed both within and without that state but the service performed without the state is temporary or transitory in nature or consists of isolated transactions, and is incidental to the individual's service within the state. 2. Services covered by an election pursuant to section 23-725. 3. Services covered by an arrangement pursuant to section 23-644, between the department and the agency charged with the administration of any other state or federal unemployment compensation law pursuant to which all services performed by an individual for an employing unit are deemed to be performed entirely within this state shall be deemed to be employment if the department has approved an election of the employing unit for which the services are performed, pursuant to which the entire service of the individual during the period covered by the election is deemed to be insured work. 4. Service performed by any officer of a corporation. 5. Service performed after December 31, 1971, outside the United States, except in Canada, by an individual who is a citizen of the United States in the employ of an American employer, other than service that is deemed employment under paragraph 1 of this subsection or the parallel provisions of another state's law if either: (a) The employer's principal place of business in the United States is located in this state. (b) The employer has no place of business in the United States, but: (i) The employer is an individual who is a resident of this state. (ii) The employer is a corporation that is organized under the laws of this state. (iii) The employer is a partnership or a trust and the number of the partners or trustees who are residents of this state is greater than the number who are residents of any one other state. (c) None of the criteria of subdivision (a) or (b) of this paragraph is met but the employer has elected coverage in this state or, the employer having failed to elect coverage in any state, the individual has filed a claim for benefits under the laws of this state. 6. Service performed after December 31, 1971, in the employ of this state or any of its instrumentalities, or in the employ of this state and one or more other states or their instrumentalities, for a hospital or institution of higher education located in this state. For purposes of this chapter, "service performed in the employ of this state for an institution of higher education" includes service performed for a community college located in this state that is or becomes integrated into the state community college system, as provided in title 15. 7. Service performed after December 31, 1971, by an individual in the employ of a religious, charitable, educational or other organization, but only if both of the following conditions are met: (a) The service is excluded from "employment" as defined in the federal unemployment tax act solely by reason of section 3306(c)(8) of that act. (b) The organization had at least four individuals in employment for some portion of a day in each of twenty different weeks, whether or not the weeks were consecutive, within either the current or preceding calendar year, regardless of whether the individuals were employed simultaneously. 8. Service performed after December 31, 1977, in the employ of this state, or any instrumentality, agency or board of this state, or any one or more of the foregoing and one or more other states. 9. An individual's service wherever performed within the United States or Canada if both of the following are true: (a) The service is not covered under the unemployment compensation law of any other state or Canada. (b) The place from which the service is directed or controlled is in this state. 10. Notwithstanding any other provisions of this chapter, service with respect to which a tax is required to be paid under any federal law imposing a tax against which credit may be taken for contributions required to be paid into a state unemployment fund or that as a condition for full tax credit against the tax imposed by the federal unemployment tax act is required to be covered under this chapter. B. For purposes of subsection A, paragraphs 6, 7 and 8, the term "employment" does not apply to service performed for any of the following: 1. In the employ of a church or convention or association of churches, or an organization that is operated primarily for religious purposes, including educational and child care services that include religious instruction, and that is operated, supervised, controlled, or principally supported by a church or convention or association of churches. 2. By a duly ordained, commissioned or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by the order. 3. In the employ of a governmental entity referred to in section 23-750, subsection A, paragraph 2, if the service is performed by an individual in the exercise of the individual's duties in any of the following: (a) As an elected official. (b) As a member of a legislative body or the judiciary, of this state or a political subdivision of this state. (c) As a member of the state national guard or air national guard. (d) As an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency. (e) In a position that pursuant to the laws of this state is designated as a major nontenured policymaking or advisory position, or a policymaking or advisory position the performance of the duties of which ordinarily does not require more than eight hours per week. 4. In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning capacity is impaired by age or physical or mental deficiency or injury, or providing remunerative work for individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive labor market, by an individual receiving such rehabilitation or remunerative work. 5. As part of an unemployment work-relief or work-training program assisted or financed in whole or in part by any federal agency or an agency of a state or political subdivision of a state, by an individual receiving such work-relief or work-training. 6. By an inmate of a custodial or penal institution. 23-615.01. Political subdivision or instrumentality employment A. Notwithstanding any law to the contrary, except for subsection B of this section, for the purposes of this chapter, employment, as defined in section 23-615, subsection A, paragraph 6, 7 or 8 includes service performed after December 31, 1977 in the employ of either of the following: 1. Any political subdivision of this state or any instrumentality of such political subdivisions. 2. Any combination of political subdivisions and this or another state, their instrumentalities, agencies or boards whether wholly within this state or partly within this state and one or more other states. B. This section shall not be applicable if Public Law 94-566 or the federal act it amends is adjudged unconstitutional or invalid in its application to the governmental entities described in subsection A of this section. If the application of Public Law 94-566 or the federal act it amends is stayed as to employees of the governmental entities described in subsection A of this section or its employees by any court of competent jurisdiction before or after the provisions of subsection A become effective, the provisions of subsection A shall not be effective from the time that the stay order became effective and continue for the duration of the stay order. C. If Public Law 94-566 is finally determined to be constitutional and the court further determines that the governmental entities described in subsection A of this section were liable for claims for benefits during a stay of enforcement then any liability shall be borne by the affected governmental entities. 23-616. Employment office "Employment office" means a free public employment office or branch thereof operated by this or any other state as a part of a state-controlled system of public employment offices, or by a federal agency charged with the administration of free public employment offices. 23-617. Exempt employment; definition "Exempt employment" means employment not considered in determining whether an employing unit constitutes an "employer" under this chapter and includes: 1. Agricultural labor as defined in section 23-603 unless the labor is performed for an employing unit that after December 31, 1977 either: (a) For some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, employed in agricultural labor at least ten individuals irrespective of whether the same individuals were employed in each day. (b) In any calendar quarter in either the current or preceding calendar year paid cash wages of twenty thousand dollars or more for agricultural labor. 2. Domestic service in a private home, local college club, or local chapter of a college fraternity or sorority unless performed after December 31, 1977, for an employing unit that in any calendar quarter in either the current or preceding calendar year paid cash wages of one thousand dollars or more to individuals employed in that service. 3. Service performed on or in connection with a vessel or aircraft that is not an American vessel or American aircraft, if the employee is employed on and in connection with the vessel or aircraft when outside the United States. 4. Service performed by an individual in the employ of the individual's son, daughter, or spouse, and service performed by an individual under twenty-one years of age in the employ of the individual's father or mother. 5. Service performed in the employ of the United States government or an instrumentality of the United States that is wholly or partially owned by the United States or that is exempt from the tax imposed by section 3301 of the federal internal revenue code, except that to the extent Congress shall permit states to require instrumentalities of the United States to make payments into an unemployment fund under a state unemployment compensation law, all of the provisions of this chapter shall be applicable to the instrumentalities, in the same manner, to the same extent and on the same terms as to all other employers, employing units, individuals and services, but if this state is not certified for any year by the secretary of labor of the United States under section 3304 of the federal internal revenue code, the payments required of the instrumentalities with respect to the year shall be refunded by the department from the fund in the same manner and within the same period as is provided in section 23-742 with respect to contributions erroneously collected. 6. Service performed in the employ of another state, or any political subdivision of another state, or an instrumentality of another state or another state's political subdivision that is wholly owned by one or more other states or political subdivisions and that exercises only governmental as distinguished from proprietary functions, and service performed in the employ of any political subdivisions of this or any other state to the extent the instrumentality, with respect to the service, is exempt under the Constitution of the United States from the tax imposed by section 3301 of the federal internal revenue code, except that part of the service performed in the employ of any of the foregoing that is "employment" under section 23-615, subsection A, paragraph 6, 7 or 8. But any state, or a political subdivision of a state, or instrumentality of any one or more of the foregoing that is wholly owned by one or more states or political subdivisions may elect coverage whether or not the service performed is governmental or proprietary for any state or political subdivision thereof or any instrumentality thereof or any department thereof in the manner prescribed and subject to the terms of section 23-725, and election may exclude any services described in section 23-615, subsection B. This state or any instrumentality or political subdivision of this state may appropriate funds to pay contributions or payments in lieu of contributions as required by this chapter. 7. Service with respect to which unemployment compensation is payable under an unemployment compensation system established by an act of Congress. 8. Service performed in any calendar quarter in the employ of an organization exempt from income tax under section 501(a) (other than an organization described in section 401(a)) or under section 521 of the federal internal revenue code, if the remuneration for such service is less than fifty dollars. 9. Service performed in the employ of a school, college or university, if the service is performed either: (a) By a student enrolled and regularly attending classes at the school, college or university. (b) By the spouse of a student if the spouse is advised at the time the spouse commences to perform the service that the employment is provided under a program to provide financial assistance to the student by the school, college or university and the employment will not be covered by any program of unemployment compensation. 10. Service performed in the employ of a corporation, community chest fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of a private shareholder or individual, no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, and that does not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of any candidate for public office; provided that services performed in the employ of an organization operated for the primary purpose of carrying on a trade or business for profit shall not be exempt on the ground that all of its profits are payable to one or more organizations exempt under this paragraph, and further provided that services exempt under this paragraph shall not include services performed for an employing unit with respect to which the employing unit is liable for any federal tax against which credit may be taken for contributions required to be paid into a state unemployment compensation fund, and further provided that services exempt under this paragraph shall not include services that are "employment" under section 23-615, subsection B, paragraph 6, 7 or 8. 11. Services performed as a student nurse in the employ of a hospital or a nurses' training school by an individual enrolled and regularly attending classes in a nurses' training school chartered or approved pursuant to state law, and service performed as an interne in the employ of a hospital by an individual who has completed a four years' course in a medical school chartered or approved pursuant to state law. 12. Service performed by an individual for an employing unit as an insurance producer, if all service performed by the individual for the employing unit is performed for remuneration solely by way of commission. 13. Service performed by an individual under the age of eighteen in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution, and service performed by an individual in, and at the time of, the sale of newspapers or magazines to ultimate consumers under an arrangement by which the newspapers or magazines are to be sold by the individual at a fixed price, the individual's compensation being based on the retention of the excess of such price over the amount at which the newspapers or magazines are charged to the individual, whether or not the individual is guaranteed a minimum amount of compensation for such service, or is entitled to be credited with the unsold newspapers or magazines turned back. 14. Service performed by an individual for an employing unit as a licensed real estate broker or a licensed cemetery broker or a licensed real estate salesman or licensed cemetery salesman, if all service performed by the individual for the employing unit is performed for remuneration solely by way of commission, except that any service performed as a real estate broker, a cemetery broker, a real estate salesman or a cemetery salesman for an employing unit to which the provisions of section 23-750 apply is not exempt employment. 15. Service performed in the employ of a foreign government including service as a consular or other officer or employee or a nondiplomatic representative. 16. Service performed in the employ of an instrumentality wholly owned by a foreign government if both: (a) The service is of a character similar to that performed in foreign countries by employees of the United States government or of an instrumentality of the United States government. (b) The department finds that the United States secretary of state has certified to the United States secretary of the treasury that the foreign government with respect to whose instrumentality exemption is claimed grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States government and of instrumentalities of the United States government. 17. Service covered by an arrangement between the department and the agency charged with the administration of any other state or federal unemployment compensation law pursuant to which all services performed by an individual for an employing unit during the period covered by the employing unit's duly approved election are deemed to be performed entirely within the agency's state. 18. Casual labor not in the course of the employer's trade or business. 19. Service performed by an individual for an employing unit as a securities salesman, if all such service performed by the individual for the employing unit is performed for remuneration solely by way of commission, except that any service performed as a securities salesman for an employing unit to which the provisions of section 23-750 apply is not exempt employment. 20. During any period in which it does not meet the definition of employment in section 23-615, subsection A, paragraph 10, service performed by an individual who is enrolled at a nonprofit or public educational institution that normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where the institution's educational activities are carried on as a student in a full-time program, and taken for credit at the institution, which combines academic instruction with work experience, if the service is an integral part of the program, and the institution has so certified to the employer, except that this paragraph shall not apply to service performed in a program established for or on behalf of an employer or group of employers. 21. Service performed in the employ of a hospital if the service is performed by a patient of the hospital. 22. Service performed by individuals solely to the extent that the compensation includes commissions, overrides or profits realized on sales primarily resulting from the in-person solicitation of orders for or making sales of consumer goods in the home, except that any service performed by an individual for an employing unit to which the provisions of section 23-750 apply is not exempt employment. 23. Services performed by an individual for an employing unit in the preparation of tax returns and related schedules and documents, if all services are performed for remuneration solely by way of commissions, independent of the control of the employing unit, other than that required by the internal revenue service for correct preparation of the returns, except that any service performed by an individual for an employing unit to which the provisions of section 23-750 apply is not exempt employment. 23-618. Fund "Fund" means the unemployment compensation fund established by section 23-701. 23-618.01. Hospital "Hospital" means an institution which has been licensed, certified, or approved by the Arizona state department of health as a hospital. 23-618.02. Institution of higher education A. "Institution of higher education" means an educational institution which: 1. Admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of such a certificate; 2. Is legally authorized within this state to provide a program of education beyond high school; 3. Provides an educational program for which it awards a bachelor's or higher degree, or provides a program which is acceptable for full credit toward such a degree, a program of post-graduate or post-doctoral studies, or a program of training to prepare students for gainful employment in a recognized occupation; and 4. Is a public or other nonprofit institution. B. Notwithstanding any of the foregoing provisions of this section, all colleges and universities in this state are institutions of higher education for purposes of this section. 23-619. Insured work "Insured work" means employment for employers. 23-619.01. Misconduct connected with the employment; wilful misconduct; evaluation A. "Misconduct connected with the employment" means any act or omission by an employee which constitutes a material or substantial breach of the employee's duties or obligations pursuant to the employment or contract of employment or which adversely affects a material or substantial interest of the employer. B. "Wilful or negligent misconduct connected with the employment" includes, but under no circumstances is limited to, the following: 1. Absence from work without either notice to the employer or good cause for failing to give notice, repeated absence from work without good cause where warnings regarding repeated absence have been received from the employer, frequent absences from work without good cause, failure to return to work following an authorized leave, vacation, sick leave or other leave of absence when such failure is without permission from the employer, or repeated failure without good cause to exercise due care for punctuality or attendance in regard to the scheduled hours of work set by the employer. 2. Repeated intoxication, whether from the use of intoxicating liquor or the use of illegal drugs, on the employer's premises or when reporting to work, frequent absences caused by intoxication or the aftereffects of intoxication, or sleeping on the employer's premises during scheduled work hours or inefficiency or inability to perform the employment, due to intoxication or the aftereffects of intoxication. 3. Failure to pass, or the refusal to take, a drug test or alcohol impairment test administered by, or at the request of, the employer pursuant to title 23, chapter 2, article 14. 4. Refusal or knowing failure to perform reasonable and proper duties assigned by the employer. 5. Insubordination, disobedience, repeated and inappropriate use of abusive language, assault on another employee or repeated fighting, refusal to accept an assignment to work at certain times or to perform certain duties without good cause, refusal to follow reasonable and proper instructions given by the employer, or intentional or negligent destruction of the employer's property. 6. Dishonesty, material falsification of employment applications or of other written documents relating to obtaining or retaining employment, falsification of time records or work records, theft or conversion of property of the employer, or untruthfulness related to the job which could substantially injure or jeopardize the employer's interest. 7. Admission of or conviction for any felony or crime related to the employer's business or to the employment or which could have a substantial adverse effect on the employer's interest, public relations or trust, unless the employer had actual knowledge of such admission or conviction at the commencement of the employment. 8. Violation without good cause of any rule of conduct, safety rule or other rule in any way related to the employment which is reasonably imposed and communicated by the employer or which can be reasonably implied from the type of employment. 9. Violence or unlawful conduct committed during a labor dispute, strike or lockout or during picketing activities on, proximate to or directed at the employer's premises, property or operations. C. Upon notification from an interested party, if a claimant has been subsequently convicted or acquitted of a felony with respect to the act for which he was separated, his claim shall be reconsidered after a tribunal hearing based on the newly available evidence. D. In evaluating misconduct, a claimant's prior history of employment with the same employer shall be considered. 23-620. State "State" includes, in addition to the states of the United States, the District of Columbia, and the Commonwealth of Puerto Rico and the Virgin Islands. 23-621. Unemployed; definition A. An individual shall be deemed "unemployed" with respect to any week during which the individual performs no services and with respect to which no wages are payable to the individual, or with respect to any week of less than full-time work without any fault on the individual's part if the wages payable to the individual with respect to the week are less than the individual's weekly benefit amount. B. An individual shall not be deemed "unemployed" with respect to any week of less than full-time work if the loss of full-time work is directly attributable to the fault of the individual. C. An individual shall not be deemed "unemployed" if the individual is receiving wages in lieu of notice or severance pay. The period of time for which wages in lieu of notice or severance pay are allocable shall be determined by either of the following: 1. If there was a written contract between the employer and the claimant in effect at the time of separation, allocate to the appropriate period in accordance with the contract, continuing for the number of work days that the pay would cover at the regular wage or salary rate. 2. If no written contract was in effect at the time of separation, allocate to the appropriate period following the last day of performance of services, continuing for the number of work days that the pay would cover at the regular wage or salary rate. D. For the purposes of this section, "severance pay" includes all amounts that an employer pays to an employee due to the employee's resignation, termination or participation in an exit incentive program or inclusion in a reduction in force or in consideration for the employee's release of actual or potential claims for the termination of employment. Severance pay does not include any amounts that the employer pays for health benefits or pursuant to any employee benefit plan. 23-621.01. United States "United States" includes, in addition to the states of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the Virgin Islands. 23-622. Wages A. "Wages" means all remuneration for services from whatever source, including commissions, bonuses and fringe benefits and the cash value of all remuneration in any medium other than cash. The reasonable cash value of remuneration in any medium other than cash shall be estimated and determined in accordance with rules prescribed by the department. B. Wages do not include: 1. For the purpose of sections 23-604, 23-726 and 23-728, that part of the remuneration, other than remuneration referred to in paragraphs 3 through 16 of this subsection, in excess of: (a) $7,000 paid in 1983 or in a calendar year thereafter through December 31, 2022 to an individual by an employer or the employer's predecessor with respect to employment during the calendar year, unless that part of the excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law. (b) $8,000 paid in the 2023 calendar year or in a calendar year thereafter to an individual by an employer or the employer's predecessor with respect to employment during the calendar year, unless that part of the excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law. 2. For the purposes of paragraph 1 of this subsection, the remuneration paid to an individual by an employer with respect to employment in another state or states, on which contributions were required of and paid by such employer under an unemployment compensation law of such other state or states, shall be included as part of remuneration equal to the amounts prescribed in paragraph 1 of this subsection. 3. The amount of any payment, including monies paid by an employer for insurance or annuities or into a fund to provide payments for insurance or annuities, made to or on behalf of an employee or any of the employee's dependents under a plan or system established by an employer that makes provision for the employer's employees gen