No. 29697 (Amendment): R994-309. Nonprofit Organizations

DAR File No.: 29697
Filed: 03/15/2007, 05:04
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This proposed amendment is to ensure the rule accurately reflects current law and practice.

Summary of the rule or change:

These changes are being made as part of the Department's effort to rewrite all of its rules. This rule was changed to more accurately reflect current practice and state and federal law. Archaic language has been removed and additional explanations and clarifying language have been added throughout. Added language that a nonprofit reimbursable employer can be liable for penalties, interest, and collection costs for late payments as provided by state law.

State statutory or constitutional authorization for this rule:

Section 35A-1-104, and Subsections 35A-1-104(4) and 35A-4-502(1)(b)

Anticipated cost or savings to:

the state budget:

This is a federally-funded program so there are no costs or savings to the state budget.

local governments:

This is a federally-funded program so there are no costs or savings to local government.

other persons:

There are no costs or savings to any other persons as there are no fees associated with this program and it is federally funded.

Compliance costs for affected persons:

There are no costs or savings to any affected persons as there are no fees associated with this program and it is federally funded. These changes will not impact any employer's contribution rate.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employer's contribution tax rate. Tani Downing, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY UT 84111-2333

Direct questions regarding this rule to:

Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/01/2007

This rule may become effective on:

05/09/2007

Authorized by:

Tani Downing, Executive Director

RULE TEXT

R994. Workforce Services, Unemployment Insurance.

R994-309. Nonprofit Organizations.

R994-309-101. Nonprofit Organization Requirements[General Definition].

[ (1) Section 35A-4-309 describes how nonprofit organizations elect the method of paying for benefits, the effective period of such election, reimbursement methods, billing and collection procedures, their rights to notice of any determination and their various appeal rights.

] [(2) ]Nonprofit organizations described in Subsection 35A-4-309(1)(b) will pay contributions in the same manner as other employers under Section 35A-4-302 unless they elect to become reimbursable employers which are liable for payments in lieu of contributions. A nonprofit organization which elects to become a reimbursable employer pays to the Department an amount equal to the regular benefits and one-half of the extended benefits paid to former employees. These reimbursements for benefits paid and other amounts due are[ due and] payable monthly. Reimbursable employers do not pay for any administrative expenses of the unemployment insurance program.

 

R994-309-103. Election of Payments by Contributions or Reimbursement.

(1) Initial Election.

A nonprofit organization electing to become a reimbursable employer must make a written election within 30 days after the organization becomes subject to the Act. Since it may take some time for the employer to obtain the IRS letter of exemption required for this election, the employer will be a contributing employer until the letter is provided to the Department timely. The employer has 30 days from the date of the IRS letter to provide a copy to the Department in order to be granted reimbursable status retroactive to the date it[he] became subject to the Act under Subsection 35A-4-309(1)(e). When the letter is provided timely, all contributions paid by the employer in excess of benefits paid to former employees will be refunded. Under Subsection 35A-4-309(1)(e) the Department may, for good cause, extend the 30-day period within which the election is made or the 30 days within which the letter of exemption is provided. An initial election to become a reimbursable employer remains in effect for at least one [contribution]calendar year.[ A contribution year is a calendar year.]

(2) Subsequent Elections.

A nonprofit organization may elect to change from the contributions to the reimbursement method or from the reimbursement to the contributions method. An election to change from the contributions to the reimbursement method can be made only if accompanied by a copy of the letter of exemption from the IRS. To be consistent with the principle of Subsection 35A-4-309(1)(d), changes from one method to the other will remain in effect for at least two [contribution]calendar years.[ A contribution year is a calendar year.] Any election to change from one method of payment to the other must be made in writing no later than 30 days prior to January 1 of the year for which the change is requested. Under Subsection 35A-4-309(1)(e) the Department may for good cause [extend]waive the 30 day period within which a change from one method to the other is requested. As provided by Subsection 35A-4-309(3), the Department may terminate the reimbursable status if the organization is delinquent in filing Form 794, Insured Employment and Wage Report, Form 3H Employer's Quarterly Wage List, making the reimbursable payments, or paying any other amounts due.

 

R994-309-104. Liability of an Organization When Changing the Method of Payment.

A nonprofit organization changing from the reimbursement to the contributions method must reimburse the Department for benefits paid on wages earned during the time the organization was a reimbursable employer. Example: A nonprofit organization was a reimbursable employer during [1985]2003 and [1986]2004. For [1987]2005 the organization elects to pay contributions. If a former employee receives benefits in [1987]2005 based on wages paid by the organization in [1986]2004, the organization must reimburse the Department for the benefits based on the [1986]2004 wages. The organization must also pay contributions on the [1987]2005 wages. If this organization changes back to the reimbursement method in [1989]2007, any benefits received by a former employee which were based on wages paid in [1988]2006 would not be subject to reimbursement since contributions have been paid on those wages.

 

R994-309-105. Reimbursable Employer's Liability for Benefits Paid.

(1) The reimbursable employer's liability is limited to the amount of benefits paid to the claimant. The employer may also be required to pay interest, penalty, and collection costs on past due amounts.

(2) The employer is not liable for benefits overpaid as a result of agency error or a Department decision which is later reversed unless the reversal was due in whole or in part to the failure of the reimbursable employer to provide complete and accurate information within the time limits [prescribed]established by the Department.

(3) Any benefits established as an overpayment, except overpayments due to the failure of the employer to provide information as provided in subparagraph (2) above, will be deducted from the employer's liability or, at the Department's discretion, refunded as the overpayment is recovered.

(4) If a claimant continues working part-time for a reimbursable employer and had other employment during the base period, the reimbursable employer may be eligible for relief of charges if all the requirements of [rule]Subsection R994-401-302(1) are met.

 

R994-309-107. Monthly Billing of Benefits Paid.

The Department will send a monthly billing to the reimbursable employer if any benefits have been paid to former employees. The billing will include the name and social security [account ]number of each claimant, the amount of the payment to each claimant on the basis of wages paid to him by the reimbursable employer in his base period, any adjustments to prior benefit charges, and the total amount paid to all such claimants during the previous calendar month.

 

KEY: unemployment compensation, nonprofit organizations

Date of Enactment or Last Substantive Amendment: [September 29, 2005]2007

Notice of Continuation: July 14, 2004

Authorizing, and Implemented or Interpreted Law: 35A-4-309