Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since January 1, 2020, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R994. Workforce Services, Unemployment Insurance.
Rule R994-309. Nonprofit Organizations.
As in effect on January 1, 2020
Table of Contents
- R994-309-101. Nonprofit Organization Requirements.
- R994-309-102. Nonprofit Organizations (Section 501(c)(3) of IRC).
- R994-309-103. Election of Payments by Contributions or Reimbursement.
- R994-309-104. Liability of an Organization When Changing the Method of Payment.
- R994-309-105. Reimbursable Employer's Liability for Benefits Paid.
- R994-309-106. Records of Benefits Paid.
- R994-309-107. Monthly Billing of Benefits Paid.
- Date of Enactment or Last Substantive Amendment
- Notice of Continuation
- Authorizing, Implemented, or Interpreted Law
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 payable monthly. Reimbursable employers do not pay for any administrative expenses of the unemployment insurance program.
Section 35A-4-309 applies only to organizations exempt from income tax as described in Section 501(c)(3) of the Internal Revenue Code. Some examples are organizations operated exclusively for religious, charitable or educational purposes. The Internal Revenue Service issues a letter of exemption to exempted organizations. A copy of this letter is required by the Department to allow a nonprofit organization to elect to become a reimbursable employer.
(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 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 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 calendar years. 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 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.
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 2003 and 2004. For 2005 the organization elects to pay contributions. If a former employee receives benefits in 2005 based on wages paid by the organization in 2004, the organization must reimburse the Department for the benefits based on the 2004 wages. The organization must also pay contributions on the 2005 wages. If this organization changes back to the reimbursement method in 2007, any benefits received by a former employee which were based on wages paid in 2006 would not be subject to reimbursement since contributions have been paid on those wages.
(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 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 Subsection R994-401-302(1) are met.
The Department will maintain records of benefits paid to former employees of reimbursable employers for five calendar years. Such records will include the name and social security account number of each employee, the week for which payment is made, and the amount of each payment.
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 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.
unemployment compensation, nonprofit organizations
July 1, 2007
June 17, 2019
For questions regarding the content or application of rules under Title R994, please contact the promulgating agency (Workforce Services, Unemployment Insurance). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.