Payroll Law for Non Profit Organizations - The Unemployment Insurance Reimbursement Method

One of the least understood payroll laws for non profit organizations is the reimbursement method for unemployment insurance. Many states allow non profits to elect the reimbursement method in lieu of paying unemployment insurance tax on every payroll. This article will provide information on the reimbursement method for unemployment insurance in New York and how non profits can apply for the reimbursement method thus saving on their payroll taxes.

What is the reimbursement method?

New York State payroll law allows for non profit organizations covered under section 501(c)(3) of the internal revenue code to elect not to pay in to the unemployment insurance fund, but rather reimburse the state on a dollar for dollar basis for benefits paid to unemployed workers. This means that the employer no longer pays the unemployment tax on payroll but should there be an unemployment claim to their account, the employer will pay the state directly dollar for dollar for the benefits the state paid to an unemployed employee.

Is the reimbursement method worthwhile?

Electing the reimbursement method over the contribution method is a difficult decision non profits have to make. Some of the things to look at are the unemployment claims history against your organization and the future behavior of the organization such as: (a) Are you hiring or firing employees? (b) The potential cost of unemployment claims versus the cost of tax contributions based on current payroll and finally (c) Your tax rate and current account balance with the state.

What is important to remember is that no matter what option you choose, there is no guaranteed way to determine that your selection will save you money in the long run. We have seen organizations with no unemployment claims for years and then switched to the reimbursement method. Then, 3 or 4 claims were filed against their account in one year. On the other hand, even in the above case, thousands of dollars can be saved over the long run. Consider the case of an organization with 50 employees, their annual cost of unemployment insurance at a rate of 4.1% under the contribution method would be $17,425 per year ($8,500 base payroll * 4.1% * 50 employees). Assuming that one or two employees will file for unemployment benefits per year, and the average employee's payroll is $25,000 per year, the benefit charged to the account under the reimbursement method would be less than $12,500.00 per year.

Once I elect, can I switch from contribution to reimbursement or vice versa?

Yes, but only at the beginning of each calendar year. Keep in mind that switching will not help you with previous claims. You still have to pay your full balance owed for claims filed under the reimbursement method.

If I switch to reimbursement method, what happens to my account balance with the state?

The account balance that you had with the state under the contribution method is kept until such date that you choose to re-elect the contribution method. If you have a positive balance, you cannot use it towards your reimbursement plan; neither can you request the state to reimburse you the amount of the positive balance.

What if my account balance is negative when I switch to the reimbursement method? The balance is kept on account until such time that you choose to re-elect the contribution method. One thing to consider is that if you have a negative balance, your rate of unemployment claims are probably high and chances are that the reimbursement method is not for you.

What happens if I switch either way in the middle of a claim?

Whether the state will view your claim as a reimbursement or contribution claim, depends not on the time the claim is made or paid, but on the base period used to calculate the employee's unemployment benefits. The base period is the payroll period upon which the worker's unemployment benefit amount is calculated, generally, the highest quarter wages paid to the worker in the first four of the last five quarters.

For example, if the base period used to calculate an employee's unemployment benefits is July through June, and you switched to the reimbursement method in January, 50% of the claim will be paid under the contribution method and 50% under the reimbursement method.

Keep in mind that switching will not help you with previous claims. You still have to pay your full balance owed while you were covered the reimbursement method.

How does one apply for the reimbursement method?

A request to elect the reimbursement option can be made when registering with the Department of Labor as an employer using form NYS-100N (New York State Employer Registration for Nonprofit Organizations) filed prior to your first payroll. In addition, the request can be submitted in writing to the Unemployment Insurance Division before the beginning of the calendar year in which it is to apply, or within 30 days after the calendar quarter in which the non profit organization or governmental entity becomes liable under the Unemployment Insurance Law.

The request could be mailed or faxed to the address and fax number below. Remember to include your federal tax ID, unemployment registration number and a copy of the organizations notice of 501(c)(3) status from the IRS and include your federal tax ID and unemployment insurance registration number;

New York State Department of Labor, Unemployment Insurance Division, State Office Building Campus, Albany, New York 12240-0322. Fax: 518-485-6172.

Copyright 2010 - PayMatic Payroll Service

PayMatic Payroll Service is a full service payroll bureau based in Rockland County, NY and has been helping nonprofit organizations work through the maze of payroll and unemployment laws for over 10 years. Because unemployment insurance law in New York is so complex and many organization administrators are busy enough as is, we found that many non profits do not take advantage of these laws and are either confused or are doing thing wrong.

To answer this need, PayMatic Payroll thoroughly researched New York's Unemployment Insurance Law, analyzed scores of different organizations of various sizes and prepared this report to help organizations make informed decisions.

Please visit us at http://www.paymaticinc.com for more information.

Unemployed Personal Loans: Planning Finances After Unemployment

Job loss is always a trying situation. Unemployment ranks highest among the stress causing conditions. Being both emotionally and financially challenging, it can be a life altering situation. It is important not to lose perspective but the lack of money can potentially affect you. Unemployed should try to see what benefits they can claim in this position and what options they have. One way to empower yourself financially is unemployed personal loans.

Unemployed personal loans can be the right solution. This loan type can be structured to fit into your individual circumstances. Unemployed personal loans should be taken keeping in mind your financial situation and repayment ability. Pros and cons of each unemployed personal loans should be properly weighed before applying. The benefits are developed keeping in mind the situation of unemployed people.

o Reduced cost due to low interest rate

o The repayments can be made once employment is gained

o Presence of benefits schemes

o Can be taken for longer term without no pressure

Unemployed personal loans are meant to be repaid. An unemployed should never lose the sight of this truth. The lender will surely look for other sources for repayment since the prerequisite of job is not fulfilled. This may include accepting the first job offer that comes in your way. If you have bright chances of finding a job in near future, the lender will not hesitate to give you unemployed personal loans. He might also refer to your past credit record. Without bad credit to dampen your claim, you can be approved in no time. Even with bad credit, some lenders will be ready to help you. But for that, you will have to be a strong contender in the job market.

If you are an unemployed with an asset to offer as security then secured personal loan can be the right option. Your home will be the most acceptable security and give you the advantage of really low interest rates. You risk losing your property in case on non-repayment. Unsecured personal loans for unemployed do not require any security and are functional for tenants, students and graduates who are looking for jobs.

Unemployed might not be very keen to borrow loan while he or she is unemployed. However, it can be a very good idea if you have several unpaid debts like credit card debts, utility bills, store card bills and other everyday expenses. Unemployed personal loans for debt consolidation are highly advised. Your lender will be able to help you with the right debt consolidation loan. You can also refer to a trusted financial advisor to guide you.

If you are the sole provider of your family, you must be worrying about how to meet the economic demands that emerge on an everyday basis. This is a normal emotional response for any unemployed. Being aware about your alternatives help you recover with this situation. Unemployed personal loans are one such alternative that can give you a way to proceed and even thrive during unemployment.

Scarlette started on a horse back and had a few falls herself. Therefore, she knows Financial decisions are to be made after considerable thought and backed by good financial understanding. Her articles might introduce you to financial sense without any falls. She suffers from no injuries now. To find all types of loans for unemployed UK Residents Please visit http://www.loansforunemployed.co.uk

Battling Society's Cancer: Unemployment

The official figures are staggering: 35% of the workforce - about 280,000 people - are unemployed and looking for a job. Each 1.43 employee support 1 unemployed person. In the USA the figure is 3.3 to 4 employees supporting all the unemployed AND all the pensioners!

The truth is less ominous. Many employed people in Macedonia go unreported. Their employers prefer not to report them as employed in order to avoid paying social benefits and retirement benefits to the state. This greatly distorts the official figures - yet, it would be safe to assume that the unemployment rate in Macedonia is close to 20%.

Unemployment has only bad aspects. A certain level of unemployment is considered to be healthy. People move between workplaces - this is called labour mobility. People desert old professions for new ones, training themselves to occupy higher paid, higher education positions. This kind of healthy unemployment is called "friction unemployment". A level of 3% to 6% is considered to be friction unemployment in the West (depending in which country).

But the kind of unemployment that is prevalent in Macedonia is not of this kind. It is permanent in the sense that the same people are unemployed continuously for more than a year. It is habit - forming: people lose their self dignity, they become dependent on outside assistance, they are afraid to face reality. Such unemployment has grave psychological consequences. People change under its influence to such an extent that they no longer qualify as workers. This affects the situation inside families. People who used to provide for their families are cast aside as no goods, losers with no prospects for the future. This deeply and adversely affects the very fabric of society's basic unit: the family.

But unemployment also has a great macroeconomic impact. The State doles out millions of DM each month to pay unemployment benefits. Multiply 60-100 DM per month per 283,000 job seekers - and you will face the frightening figures the Macedonian Minister of Finance is faced with every morning. Instead of putting this money to productive use - it is spent on keeping people idle at home on an allowance which is not even enough for bare subsistence. No one is happy: the Government - because its budget is unduly and unnecessarily inflated, the nation - because good money is thus spent instead of being invested and the unemployed - because they can hardly survive on what the State gives them.

Unemployment is not unique to economies in transition. Even much stronger economies - like France's and Spain's - suffer from it. Spain's real unemployment rate is similar to Macedonia's.

What are the long term, structural causes for unemployment?

There are more theories than there are unemployed people.

Some say that free trade encourages unemployment of unskilled and semi-skilled labour. Factories move overseas to places where labour is cheaper. Inexpensive imports of textiles and basic electronic wares compete with the local production and - usually - wound it badly.

Others blame labour market rigidities. If the psychology of employees and employers alike is that of "one big family" where no one is fired even in hard times and even if he is incompetent. If the laws and regulations of the state are in favour of a static workforce. If social benefits (annual vacation, sick pay, child support) increase the costs of employing - unemployment will be created. Employers will not hire additional staff in times of economic boom - because they will not be able to fire them in time of crisis. They will prefer to manufacture in places where labour costs are negotiable and low. Where trade unions have been abolished (Britain and the USA are the prime examples) - unemployment all but disappeared. Yet others emphasize the technological revolution (mainly in the fields of informatics). So many professions become obsolete at such a quick pace - and so many professions are revolutionized so often - that more jobs are lost than created.

But whatever the reasons are for unemployment - certain countries are battling this cancer of society in creative ways.

During the 1990's, Israel - a country with 4,500,000 million people and 20,700 square kilometres - absorbed an inflow of more than 600,000 immigrants (=15% of the population), mainly from the former USSR.

One could expect a dramatic increase in unemployment. If Macedonia were to absorb 300,000 additional immigrants (=15% of its population) tomorrow - its unemployment rate would have skyrocketed until the newcomers would have been absorbed by the marketplace.

Not only did Israel succeed in providing most of this deluge of immigrants with jobs - it also reduced the overall rate of unemployment among its old population! How did it succeed in doing the impossible?

Israel decided to give the unemployment benefits to the employer - not to the unemployed. Let us study an example:

The average unemployment benefit was 900 DM per person per month.

The average salary which an employer was supposed to pay this person if he were employed - would have been 1400 DM per month.

The Government came to the employer with the following suggestion:

Find employment for the unemployed person. Pay him a salary of 1400 DM. We will give you, the employer, 900 DM - instead of paying this amount directly to the unemployed person in the form of unemployment benefits.

So, everyone was happy:

The employer hired an experienced and well - educated worker for 500 DM (The difference between the 1400 DM that he paid him - and the 900 DM that he got back from the Government).

The unemployed person - because he finally found employment with a real chance to continue to be employed in the future if he really contributed to the business that he was employed in.

The Government was happy - because it did not increase its budgetary outlays and expenditures. Yet, at the same time it has increased the level of employment in the economy.

Another Israeli twist: the Government also paid part of the social benefits of the person who was previously unemployed in his first three years of employment. This saved the employer a lot of money and encouraged him to employ and to report the employed person to the authorities.

A whole different approach was experimented with in Great Britain.

All those unemployed in a specific geographic region were assembled into a "Community". The Community included a wide variety of professions:

carpenters and tailors, electricians and farm hands, gardeners and teachers. A computerized centre was set up. Each unemployed person registered with this centre, listing both his professional capabilities - and goods and services that he was interested in, but did not have the money to purchase.

A matching process then ensued: the tailor was looking for a teacher to give his children some private lessons (which he could not afford in his current financial straits). The teacher was looking for a tailor to saw a communion dress for her daughter. So, the computer matched them up:

The teacher tutored the tailor's children - in return for his services in sawing the dress for her daughter. Both of them were thus employed, recovering their sense of self-worth and dignity. Moreover, both of them were able to afford things which were badly needed by them but which they could afford under no other circumstances.

This is a return to primordial, pre-monetary, barter economy.

But who will determine how many private lessons provided by the teacher - are worth one dress sawed by the tailor?

A special tariff was published. It reflected the conditions which prevailed in the "real" marketplace in which real money changed hands.

To ease the "payment" process - special Community money was printed in lieu of the unemployment benefits which the government used to dole out to the members of the Community.

Now, each member of the Community received from the Government a monthly allowance in Community money (instead of real money) which he was able to use only with other members of the community, unemployed as he was.

This way, the purchasing power of the unemployed was used exclusively with the other unemployed, easing their overall situation. It also eased the Government's situation - because it did not have to print additional money to pay out unemployment benefits.

Admittedly, this was a fairly small and restricted experiment - but it was so successful that I believe that it warrants the attention of every nation facing high unemployment.

Bitter is the New Black: Confessions of a Condescending, Egomaniacal, Self-Centered Smartass, Or, Why YouShould Never Carry A Prada Bag to the Unemployment Office

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This is the smart-mouthed, soul-searching story of a woman trying to figure out what happens next when she's gone from six figures to unemployment checks and she stops to reconsider some of the less-than-rosy attitudes and values she thought she'd never have to answer for when times were good.

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What Is Unemployment

In economics, unemployment refers to the condition and extent of joblessness within an economy, and is measured in terms of the unemployment rate, which is the number of unemployed workers divided by the total civilian labor force. Hence, unemployment is the condition of not having a job, often referred to as being "out of work", or unemployed

The terms unemployment and unemployed are sometimes used to refer to other inputs to production that are not being fully used, for example, unemployed capital goods.

The history of unemployment is the history of industrialization. It was not considered an issue in rural areas, despite the "disguised unemployment" of rural laborers having little to do, especially in conditions of overpopulation.

The Office for National Statistics (ONS) produces official estimates of unemployment using the International Labour Organization definition. Under this definition people aged 16 and over are unemployed if they are out of work, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks; or are out of work, have found a job and are waiting to start it in the next two weeks.

Unemployment levels are increasing dramatically in many parts of the world. There are several causes behind this increasing rate. But the main reason for the high level of unemployment is technological progress. In a fewer year far less working hours are needed to produced all the goods that are required, hence there will be less demand of labour. This can lead more to the raise of unemployment ratio.

On the other hand, traditionalism, ignorance and over population etc are some other major cause that led to the raise of unemployment.

Today, unemployment data are useful for a variety of reasons. The government use unemployment along with other labour market indicators for macro-economic and labour market management. Data are also supplied to a range of international organizations such as the European Central Bank. In the social policy domain, unemployment is used as an indicator of relative hardship.

Today, unemployment is the major crisis worldwide, to keep check on it is very much essential, it is you, who can change the word unemployment into employment.

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Author Richa Sinha is associated with Unemployment Articles [http://www.unemployment-articles.info]. From here you can gather more information on unemployment office [http://www.unemployment-articles.info/unemployment-office.html].

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