Helping CA Nonprofits Reduce Unemployment Costs

1
Helping CA NonprofitsReduceUnemployment Costs

• Ellen Johnson
• 501(c) Agencies Trust

2
Agenda

• Background on SUI Options
• History
• Effect on Employees
• The 3 Options
• Evaluating Your Options

3
Nonprofits Have Legal Right Not to Pay UI Taxes

• 1972 - Congress amended the Social Security Act.
  Nonprofits had to provide unemployment benefits
• Pay SUI tax
• or
• Reimburse state for
• actual claims

4
1978 Nonprofit Study

• Nonprofits traditionally have
• lower turnover and
• fewer unemployment claims
• Nationally,
• nonprofits pay about 2.20 in taxes
• for every 1.00 paid in benefits/claims

5

• Why Pay State
• Unemployment Taxes
• When You
• Dont Have to?

6
Former Employees Receive Help

• Unemployment is paid by employer.
• There is no difference for your employees. They
  file for benefits with the Employment Department
• Unemployment office determines if they are
  eligible.

7
Whats Best for your Agency?

• Pay SUI Taxes
• Self-Reimburse
• (pay state for claims)
• 501(c) Agencies Trust Membership

8
Pay Unemployment Taxes

• Taxes based on assigned tax rate and taxable
  payroll
• CA has high SUI tax rate
• Usually you pay more in taxes than claims paid to
  former employees
• You pay for claims from other employers claims
  ARE pooled

9
Reimbursing on your own

• You only pay for your claimsno tax payments
• Managing unemployment correctly is time-consuming
• Budget planning difficult

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501(c) Agencies Trust

• Helps you opt out of tax system
• Costs less than taxes
• Services reduce time and expense
• Member-owned reserve account grows with
  investments
• Only pay for your claimsno pooling

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501(c) Agencies Trust

• In 1982 United Way of Silicon Valley develops the
  first unemployment Trust with 21 agencies
• Board of Trustees is appointed from the nonprofit
  membership
• Members developed program to provide safety and
  security

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Trust ProvidesSafety and Security

• Professional Claims Management
• Professionals help you plan layoffs, contest
  claims, audit charges and more
• Individual Reserve Account
• Owned by you. Grows with conservative
  investments with average 10 growth since 2002
• Stop Loss Insurance
• Protects your reserve account
• Human Resources Program
• Free, expert advice on all HR issues, toll-free
  Hotline, monthly email updates, newsletter and
  educational trainings

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Some Trust Partners

• CA Alliance for Children and Families
• CA Rehabilitation Association
• CA Rural Health Clinics
• United Services Group
• Boys Girls Clubs of America
• National Human Services Assembly
• National Rural Health Association
• YMCA and YWCA of the USA
• UNICEF

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Advantages of Trust

• Staff and board with extensive nonprofit
  experience
• Unemployment for nonprofits is our only business
• We reduce your UI expensescost less than taxes
• Stabilize budget planning and provide claims
  management services for reimbursing nonprofits
• Our goal is to advise nonprofits which option is
  best

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Next Steps

• Complete Evaluation Form
• Receive cost-free analysis
• Discuss Options
• Evaluate
• Enroll by state deadline
• March 31

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Can You Save Money?

• Complete
• Evaluation
• Form
• And
• Learn More

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501(c) Agencies TrustContact Information

• Ellen Johnson
• 800-442-4867
• EJohnson_at_501c.com
• Website and
• The Executive Briefing
• www.501cTrust.org

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Helping You Help Others

• Last year
• 1,600 member agencies
• saved over 50 million
• in the Trust.
• Care to join them?