President Barack Obama used his Saturday, January 16, 2015 radio address to push for a modernization of the current federal unemployment insurance program. In his address, Obama summarized a plan designed to make it easier for workers to get unemployment insurance, find a new job, and have additional assistance when a new job pays less than the old one.
Under Obama’s plan, unemployment benefits would be standardized across the country. Unemployment benefits would last for up to 26 weeks. States with high unemployment could receive federal funding to support up to 52 weeks of unemployment benefits.
The President’s plan comes at a time when many state unemployment insurance pools are finally recovering from the Great Recession allowing states to lower their unemployment insurance taxes. Some states have used low unemployment as a reason to not only lower unemployment taxes but to decrease benefits for workers.
In today’s economy it takes, on average, seven months for workers to find new employment after a layoff. Only 30% of the unemployed find a job in less than five weeks. That is not just because the job-seeker is slow or bad at looking for work; its because the employers are too. Most organizations take just over 22 days to hire for an average position (non-officer).
A more detailed fact sheet of the President’s plan can be found here.
Unemployment insurance taxes apply to all U.S. employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many nonprofits could save as much as 30 percent more on their unemployment cost by opting out of the unemployment insurance tax system – an advantage provided to them by the IRS. Doing so affords nonprofits unique avenues that allow them to strategically handle unemployment claims administration and unemployment insurance taxes in ways that for-profits can only dream about.
Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.