Unemployment benefits provide a financial bridge for unemployed individuals to their next source of employment. The unemployment system, however, has a high propensity for being subject to abuse, fraud, and improper claims. With these concerns in mind, this article provides information to ensure you, a nonprofit employer, are in compliance with the Georgia Department of Labor guidelines and to protect your nonprofit organization from improper unemployment claims.
Although 501(c)(3) nonprofit organizations in Georgia are exempt from federal unemployment taxes (FUTA), they may still have to pay state unemployment taxes. Nonprofit organizations are responsible for unemployment insurance coverage if they employ four or more workers in each of 20 different weeks during a calendar year. At least one officer or director must be included in the count, regardless of whether the officer or director is an employee.
Nonprofit organizations that meet this requirement have an option as to how they manage their unemployment insurance. Like for-profits, they can pay for unemployment claims through Georgia’s unemployment tax system commonly known as SUTA (State Unemployment Taxes and rates). Under this system, unemployment taxes are paid on a regular basis by the employer as a percentage of payroll through a method known as the “contributory” method.
Alternatively, nonprofits can opt for the “reimbursable” method under which the organization chooses to self-insure unemployment claims and would not pay SUTA. Instead, in the event that unemployment benefits are paid to former employees, the nonprofit would reimburse the Georgia Department of Labor for the actual costs of those benefits that were paid by the State. Nonprofits that elect the reimbursable method are often required by the Department of Labor to make a cash deposit or post a surety bond.
All employers, including nonprofit organizations, must register with the Department of Labor as soon as they make their first payroll. And nonprofits that reach the four employee count must either begin to pay state unemployment tax or file an election to choose the reimbursable method.
For more information about unemployment insurance for Georgia nonprofits, Click here.
Although nonprofit organizations in Georgia are exempt from federal unemployment taxes, they may still be responsible for paying state unemployment taxes. This article helps you stay in compliance with state unemployment requirements while alerting you to an option only available to nonprofits.
Georgia has seen some of the highest unemployment rates in the country resulting in historic levels of claims for unemployment insurance. Unemployment insurance is temporary income for workers who are unemployed through no fault of their own. In Georgia, employers pay the entire cost of unemployment insurance benefits but nonprofit employers have options for how they pay those unemployment costs and small nonprofits may not be required to pay at all. Nonprofits can avoid paying unnecessary unemployment costs by understanding the system and appealing improper claims.
During this one hour webcast, our speaker explains:
- Which employers are required to pay into Georgia’s unemployment tax system;
- Options for nonprofits in paying unemployment;
- Who is eligible for unemployment benefits;
- How to avoid paying unnecessary unemployment costs; and
- What to expect in an appeal.
Presenter: Tracie Johnson Maurer, Of Counsel, Jackson Lewis LLP