In a study finding that probably won’t shock anyone working with a nonprofit, it has been found that an organized nonprofit sector is linked to reduced unemployment rates in the surrounding community.

By categorizing an organized nonprofit sector to include the number of nonprofits per capita in each community and the degree to which nonprofits directly engage local residents, the study, “Civic Health and Unemployment II: The Case Builds,” presented three key findings:

1. There is less unemployment within counties that have a higher density of nonprofits than in similar counties that have a lower number of nonprofits,
2. Social cohesion, or “the level at which citizens trust, talk to and help neighbors, and socialize with family and friends,” is another strong factor in preventing unemployment, and that
3. The organizations most likely to be linked to lower rates of local unemployment are those that “provide direct, tangible benefits to their members” and those “whose supporters perceived themselves as genuine members.”

Further emphasizing the importance of an organized nonprofit community that is involved with those in the local area, the study suggests that while nonprofits directly contribute to a lower unemployment rate by creating jobs, there also appears to be a ripple effect in which organizations that engage with local residents create a change in the local unemployment rate.

Released by the National Conference on Citizenship this study may well become highly influential for those who most often are called upon to discuss the importance of establishing strong nonprofit sectors. And although it doesn’t offer all the answers as to why organized, involved nonprofits are able to directly impact unemployment rates, there will undoubtedly be more information to come in the next few months as the unemployment rate continues to trend downward.

Read the original NPQ article here.

In late March, New Mexico’s Gov. Susana Martinez reactivated a long-dormant council in hopes of fixing the state’s rapidly shrinking unemployment insurance (UI) trust fund. Since 2009, the fund has dropped from more than $500 million to $60.6 million.

Like many states desperately trying to save their funds from insolvency, legislators in New Mexico passed a bill last year that would have slashed unemployment benefits and hiked the premiums businesses still in the tax-rated state system would have to pay. Martinez, however, eliminated the higher premiums and signed a new bill this year that approved lower rates through 2013.

Senator Gerald Ortiz y Pino (D- Albuquerque) is warning, though, that the state will soon have to borrow from the federal government at a high interest rate because employers only paid $197.8 million into the fund last year. And with more than 40,000 employers drawing from the fund, the remaining $60 million won’t go far.

For nonprofit agencies still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.

In fact, New Mexico nonprofits that leave the state system and join UST save an average of $3,483 a year.

To learn more about your opt out alternatives, visit http://www.chooseust.org/501c3-unemployment-alternatives/ or sign up for the an upcoming Exclusive Nonprofit Savings webinar.

Read the full Albuquerque Journal article here.

When unemployment insurance benefits were first offered in the 1930s, the question of whether an employee deserved to collect was fairly straightforward. The answer simply revolved around whether or not an employee had lost their job through any fault of their own, whether they were available for work, and whether they were actively looking for work.

Three questions—questions that could be solved with a simple ‘yes’ or ‘no’—determined who could, and who could not, collect unemployment benefits.

In recent years though, the question of which employees deserve to be able to collect has become a much more complicated topic as budgets have been restricted and more and more jobless workers apply for unemployment benefits.

But now, another complicated topic of discussion has arisen: Should millionaires that meet all other standards be allowed to collect unemployment insurance benefits?

First debated on the Senate floor after a Congressional Research Service report revealed that almost 2,400 people with annual household incomes topping $1 million, and another 954,000 with incomes topping $100,000, received unemployment insurance benefits in 2009 the question has received shocked attention.

While these groups only make up 0.08 percent of the 11.3 million U.S. tax filers who reported unemployment insurance income in 2009, the report was released after about 1.1 million people exhausted their jobless benefits during the second quarter of 2012. The timing of the release served to further drive home the importance of finding a long term solution for state unemployment insurance trust funds, many of which have run low, as another 4.6 million jobless workers filed for benefits.

As the nationwide jobless rate continues to remain around 8 percent, and more jobless benefits run out, the question of who collects unemployment benefits must be definitely answered. But, what other questions will the answer reveal?

Read the Bloomberg News article here.

Everyone knows that employees are your most valuable asset. Your relationships with them—both individually and as a working group—determine the productivity and success of your agency.

But many nonprofits put relationships with employees at a lower level of importance than relationships with donors and other funding sources. Ultimately this common mistake undermines the entire organization and detracts from your mission because it creates a counterproductive work environment.

To begin fixing these botched relationships, and celebrating your employees for who they are and what they do, we’ve put together the top 3 things NOT TO DO.

1. Playing favorites: We all know you have favorite employees. Whether they’re your top performers, best friends, or just people you really like for the job, don’t treat them any differently than you treat the rest of your employees.

Better yet, treat the rest of your employees the same way you treat your favorites.

2. Not giving employees a forum for voicing suggestions: If you want employees to know that they’re valued members of your organization encourage them to make suggestions to improve your operations or the way that their job is handled.

More importantly, take the time to recognize and implement the best suggestions. This will motivate employees to improve working processes and implement new activities.

3. Lack of communication with employees: Open and easy communication helps build the strongest relationships within your agency.

However you accomplish it, make sure that you’re present and easy to get in touch with when employees want, or need, to talk.

Connect with us on Facebook, on Twitter @USTTrust, or on LinkedIn and tell us what other things you would add to the list.

In late March, New Mexico’s Gov. Susana Martinez reactivated a long-dormant council in hopes of fixing the state’s rapidly shrinking unemployment insurance (UI) trust fund. Since 2009, the fund has dropped from more than $500 million to $60.6 million.

Like many states desperately trying to save their funds from insolvency, legislators in New Mexico passed a bill last year that would have slashed unemployment benefits and hiked the premiums businesses still in the tax-rated state system would have to pay. Martinez, however, eliminated the higher premiums and signed a new bill this year that approved lower rates through 2013.

Senator Gerald Ortiz y Pino (D- Albuquerque) is warning, though, that the state will soon have to borrow from the federal government at a high interest rate because employers only paid $197.8 million into the fund last year. And with more than 40,000 employers drawing from the fund, the remaining $60 million won’t go far.

For nonprofit agencies still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.

In fact, New Mexico nonprofits that leave the state system and join UST save an average of $3,483 a year.

To learn more about your opt out alternatives, visit http://www.chooseust.org/501c3-unemployment-alternatives/ or sign up for the an upcoming Exclusive Nonprofit Savings webinar.

Read the full Albuquerque Journal article here.

Made available to us by the National Council of Nonprofits (as featured in their March 11 issue of Nonprofit Advocacy Matters), the following infographic helps illustrate the true human impact of the sequestration.

Sequestration infographic

According to Ragan’s HR Communication News there are five questions that every employee wants—and needs—to have answered to be feel confident and successful in their position within your nonprofit organization.

For you, answering these questions is critical to creating an invested workforce that sparks the creativity and drive that your mission thrives on. Answering the questions also gives employees a sense of who they are and where they fit in your agency, which leads to more productive, and innovative, workdays.

1. What is expected of me? This question may seem obvious, but if you don’t have a clearly developed job description that outlines how each position fits into the overall organizational goals, and how the position is critical to reaching your mission goals, employees may feel that they’re just floating in the void. By clearly laying how a position fits into your nonprofit goals, you allow your employees to actively engage in making your nonprofit a successful place to work. If you haven’t yet, read this to learn more about developing strong employee objectives.
2. How am I doing? Don’t structure your nonprofit so that employees are only getting feedback on the things they do wrong—it’s disheartening and keeps people from extending themselves. Make sure that managers are regularly scheduling meetings with the employees they oversee to give regular feedback on how the employee is doing. And ensure that when employees do something awesome they hear about it! Employees want to have regular feedback (both good and bad) and if they don’t get it from you, they may find another nonprofit that does offer them the opportunity for growth.
3. Where do I stand? Schedule a formal evaluation of each of your employees every year. An expansion of question 2, this allows you to discuss their accomplishments, opportunities for further growth and improvement, and the challenges that they’ve dealt with. This annual assessment meeting also allows you and your employees to review what is expected of each of them and how this has changed in the past year.
4. How can I improve? As we’ve said before, you must give employees the opportunities to gain more professional skills and understanding if you want them to stay with your nonprofit for the long haul. It’s vital to keeping employees happy. But, offering opportunities for improvement also allows you to further the mission of your nonprofit. By strengthening every member on your team, you become more able to meet new situations head on.
5. How can I grow and challenge myself? A more focused version of question 4, this question allows you to re-recruit employees by reminding each other why the fit works. Find out where they want to go in their career and determine how this fits in with your organizational assessment of their abilities. Whether this means you add to an employee’s daily duties, you move them up in the organization, or whatever else works for you, re-recruiting employees challenges both you and them to create a high-performance, high-quality workplace that is even more focused on your mission.

Answering these questions is only part of a strong employee retention policy though. What other steps do you take to keep employees engaged and excited about your nonprofit?

Read the original Ragan article here.

Federally mandated changes to the state-run unemployment system will be rolling into effect over the next 6 months as the October 2013 deadline looms, forcing employers to comply with stricter administration standards or face high penalties. UST helps member nonprofits comply to avoid costly errors.

– Interview Available-

Santa Barbara, CA (April 18, 2013) – In an effort to reduce potential penalties for its nonprofit employer members, the Unemployment Services Trust (UST) has launched several new efforts and technological tools to help address what is being called the federal “UI Integrity mandate.”

Passed as a part of the Trade Adjustment Assistance Extension Act of 2011, the Unemployment Insurance (UI) Integrity mandate requires all employers to provide a complete and timely response to the state’s first request for information about an unemployment claim. Designed to address one of the biggest weaknesses of Unemployment Insurance (UI) funds nationwide—the persistence of unemployment benefits paid in error, which are have cost $10.3 billion in the last year—the UI Integrity Act requires full compliance from all states no later than October 21, 2013. As of today, 5 states (NE, OK, MS, IL, and WV) have enacted legislation with 6 additional states (CA, UT, NM, SD, MN, and NC) passing legislation to be enacted in the coming months. 12 states (WA, OR, ID, MT, WY, CO, AZ, ND, IA, LA, KY, and VA) have pending legislation. The remaining states have yet to take any action to meet the federal deadline.

To ensure that the reform yields the necessary savings, there will be penalties on employers for non-compliance. Any employer that fails to provide a complete and timely response to a claim loses any hope of relief from charges attributable to that claim—even if the employer ultimately wins the claim.

Further, if the state identifies a pattern of failure to provide complete and timely responses, negligent organizations and their claims administrator are at risk of permanently losing valuable protest rights and/or facing monetary penalties.

To address these new liabilities, the Unemployment Services Trust (UST), which helps more than 2,000 nonprofit employers nationwide to reduce the cost of unemployment claims, is conducting regional seminars and state-specific webinars for its members. Through its partnership with Equifax Workforce Solutions (WS), UST’s educational opportunities will allow its nonprofit members to examine how changes to the national UI integrity laws will affect them and to gather helpful tips to improve overall win ratios when protesting improper claims. On average, this type of diligence reduces an employer’s claims costs by 15% each year.

In addition to the seminars and webinars, UST’s nonprofit members now have access to a unique unemployment claim dashboard called CaseBuilder, which was launched by WS earlier this year. “This online dashboard will allow organizations to gather and submit documents and details in a fast, secure environment for all stages of the unemployment process,” reports Workforce Solutions. Current members who utilize CaseBuilder have significantly increased their ability to comply with state requests in a timely manner—which will be extremely pertinent as states begin to integrate UI Integrity legislation into their practices.

Finally, members of UST are already reaping the benefits of “SIDES,” the State Information Data Exchange System that 24 states have implemented, with more scheduled throughout 2013. SIDES is a secure, paperless system which allows UST members and their claims administrator WS to better provide necessary details and documentation at the time of an initial claim filing. Here is how it is helping UST member organizations:

• It’s electronic, so it’s more secure than paper documents.
• Electronic delivery of claims from the state will increase the amount of time employers have to respond to requests for separation information.
• SIDES was specifically designed to require details as a part of the response. Providing the details up front will save time by reducing additional requests for information.

“All employers will be on the hook to respond to every unemployment claim, every time,” says Donna Groh, Executive Director of UST. “We’re trying to establish best practices that ensure our member nonprofits are ahead of the curve—so they can avoid penalties down the road.”

About UST: Founded by nonprofits, for nonprofits, UST is the largest unemployment trust in the nation, providing 501(c)(3) organizations with a safe, cost-effective alternative to paying state unemployment taxes. Equifax Workforce Solutions (WS) is UST’s partner to provide members with claim administration, audits of state charges, and hearing representation if a member’s claims protest goes to court. They also provide educational seminars and training materials to UST member agencies throughout the year. Visit www.ChooseUST.org to learn more.

For the 59^th month in a row, the Georgia Department of Labor has announced that the unemployment rate, at 9.3 percent, remains higher than the national average. Only 7 states, including Washington D.C., have a higher unemployment rate.

For nonprofits, this isn’t the worst of the news.

After falling below 9 percent in April for the first time in more than 3 years, the rate has begun a steady climb upward again, negatively affecting nonprofit employers throughout Georgia by simultaneously increasing cost and need. Compounded by the state’s depleted unemployment insurance trust fund and an outstanding loan balance of more than $742 million that is still owed to the federal government, nonprofits are facing a higher possibility increased unemployment taxes in 2013.

Because Georgia quickly depleted its unemployment insurance (UI) trust fund, the struggle to provide benefits has hurt employers and jobless workers as the state has made large cuts to benefits and steeply increased the overall unemployment costs paid by employers.

Further adding to the coming financial strain, the interest on the federal unemployment trust fund loan cannot be paid from the unemployment tax fund and must instead be paid from other state revenues, causing further financial stress for legislators.

To pay it, the Georgia legislature passed SB 347 earlier this year, which, in addition to cutting jobless benefits and increasing unemployment benefits paid out by employers, includes provisions to:

• Assess employers an unemployment insurance tax on the first $9,500 of each employee’s wages, up from the current $8,500, beginning January 1, 2013.
• Assess employers a solvency tax, called the Statewide Reserve Ratio surcharge, whenever the balance in the state’s unemployment fund falls below a specified level.
• Reduce the number of weeks jobless workers can collect unemployment benefits from 26 to a period ranging from 14-20 weeks depending on how high the statewide unemployment rate is.

While this legislation makes Georgia one of 11 states that have cut jobless benefits in the past year by reducing the duration and level of payouts and by restricting eligibility, the legislation may ultimately harm nonprofits specifically as it forces unemployed workers to turn to nonprofits for aid, while also increasing the amount that agencies must set aside to pay for unemployment costs of their own.

For nonprofit organizations still in the state tax system, there are other options available though. Since 1972 nonprofit employers have had the exclusive ability to opt out of the state system and reimburse directly the dollar-for-dollar costs of only their own unemployment costs.

By safely leaving the state’s pooled liability system and paying only for their own unemployment costs, many nonprofits- particularly those with 10 or more employees- can save up to 50 percent off of their UI taxes and gain greater predictive control over yearly budgeting. In fact, Georgia nonprofits that leave the state system and join UST save an average of $14,321 a year.

Learn more about your nonprofits money saving alternatives, or sign up for an upcoming webinar to learn how UST can help your nonprofit reduce SUI costs.

Read the original Savannah Morning News article.

When the federal government established the Unemployment Insurance (UI) system after the Great Depression, it was designed to support workers who, “through no fault of their own” lost their jobs. Established to ensure that the economy could recover in the face of massive job losses, the state UI system is supposed to be a safety net.

The system is far from perfect though.

For instance, the system is intrinsically flawed for many nonprofit employers who face little to no job-turnover and who remain a part of their state system. Featured in a recent report, the North Carolina UI system has provided one of the strongest examples of why eligible 501(c)(3)’s should consider opting out of their state UI system, as allowed by federal law.

After borrowing more than $2.4 billion from the federal government to meet their UI responsibilities after their UI Trust Fund became insolvent during the Great Recession, North Carolina has begun leveraging their high interest payments on state UI participants.

Like many states which were unable to meet their UI obligations, the burden of reimbursing the federal government for the full loans falls on all employers within the state, whether or not any of their former employees are currently collecting unemployment benefits.

No state reached insolvency overnight though.

Long before the recent recession, states resisted “indexing” or raising their unemployment taxes from year to year. Things were good, the economy was stable — why should they make adjustments? But while employers enjoyed low taxes, in the long run they were being set up for a much bigger fall in the future. And that’s when the Great Recession hit. Not only had states failed to maintain an adequate UI cushion, employers would be double-hit by the recession in having to lay off workers to cut costs, and then pay higher unemployment taxes as a result. According to a 2010 Government Accountability Office report, “Long-standing UI tax policies and practices in many states over 3 decades have eroded trust fund reserves, leaving states in a weak position prior to the recent recession.” Not that states weren’t warned. Even in North Carolina, the Budget and Tax Center reports that it “conducted a thorough analysis of the unemployment insurance system in March 2007, before the start of the Great Recession, warning of the long-term unsustainability of the system as implemented and suggesting reforms.”

More than ever, systems today must be built that can better weather economic downturns and large, prolonged layoffs. Adequate funding levels must be re-attained so that states rely less on the federal government for funding support to meet benefit payments. A system must also be built which maintains its ability to support the economy with wage-replacement levels that are adequate in supporting workers seeking work.

While innovative programs must continue to be introduced to help place jobseekers in new positions, an overhaul of many state UI systems would better support nonprofit employers who remain in their state tax-rated UI system whether they are too small to opt out, or if they feel safer in the state system.

However, because 501(c)(3)s have the exclusive right to opt out of their state UI system in favor of becoming a reimbursing employer that pays directly for former employees’ UI costs, many already experience a greater savings because they aren’t paying for the state’s interest on federal loans, or subsidizing larger employers’ UI costs.

Social media has taken over millions of nonprofits. It provides a cheap, easy way for agencies working on a limited budget to reach their target audience and build new contacts. And, it can be one of the most effective ways for nonprofits to spread word about what they do and how they do it.

Recent reports show that despite shrinking budgets, and extensive staffing challenges across the board, nonprofits are still finding value in growing their social networks. According to one blogger, recent studies have found that:

• 98% of nonprofit agencies have a Facebook page with an average community size of over 8000 fans.
• Average Facebook and Twitter communities grew by 30 and 81% respectively.
• Average value of a Facebook “like” is $214.81 over the 12 months following acquisition.
• 73% allocate half of a full-time employee to managing their social networking activities.
• 43% budget $0 for their social networking activities.
• The top 3 factors most nonprofits are using to gauge the success of their social media are: strategy, prioritization, and dedicated staff.

Statistics compiled by Katya’s Non-profit Marketing Blog

But still, social media presents some distinctive challenges for nonprofit organizations.

Because social media provides captive audiences with thousands of attention-grabbing options, nonprofits have to find quick, easy ways to distribute their information and to keep fans engaged. Using interesting infographics goes a long way to keeping your audience aware and involved with a nonprofit mission though.

Innovative and easy to digest, infographics combine key

facts, compelling stories, and interesting imagery that work to start conversations both online and off. “Good visualizations can also help charities better understand their own data and use those insights to improve their programs,” said Jake Porway, founder of Data without Borders, in an article published by The Chronicle of Philanthropy.

By sharing simple messages that can be understood with little or no prior knowledge of the subject matter, nonprofits are finding that they can easily improve their operations and increase their reach.

For more examples of well received infographics and tips on how to make your own, read the full article on The Chronicle of Philanthropy.

In December 2007 when the Great Recession officially began, it’s doubtful that anyone could have predicted that over the next several years almost 35 states would face insolvent unemployment insurance (UI) trust funds.

For Connecticut, and its pool of steadily increasing jobless workers, it took just over two years.

And now, three years after reaching insolvency, the price of the state’s debt is being leveraged on all employers remaining in the tax rated state system.

Although the principal balance of the $632 million loan isn’t yet due, employers are already being called on to cover the interest payments for the debt. For nonprofits remaining within the state UI system, their organization can expect to add approximately $1.70 per thousand dollars of taxable payroll, or about $25.50 per full time employee to their 2012 UI taxes.

As required by law, all employers within the state tax system will be billed directly for this assessment on or about August 1, which must be paid by August 31. Paid outside of the normal state UI system, this additional fee will add on to the gross overpayment of more than $162 million made by Connecticut in the past three years.

For nonprofits still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.

By reimbursing the state dollar-for-dollar the claims of only their own former employees, nonprofits that join UST are able to stop overpaying in the state tax system and do more with their money. In fact, Connecticut nonprofits with 10 or more employees can expect to save an average of $10,484 a year after joining UST.

Written by Barry Omahen, CPA, Managing Partner, and Stephanie Kretschmer, Marketing Manager, Lindquist LLP

If your organization is considering having an audit for the first time or changing auditors, it is wise to exercise due diligence when obtaining bids for services. With the continued focus on transparency and accountability by government agencies, donors, parent organizations and the general public, the selection of a qualified certified public accountant (CPA) has become increasingly important.

Quality audit and accounting services help nonprofit organizations safeguard their assets; improve internal controls and efficiency; complete timely and accurate returns to comply with federal and state regulatory filing requirements; and stay on top of regulatory requirements, accounting standards and industry best practices.

Before you request bids, your organization needs to answer a few key questions:

1. Who is going to be responsible for the selection process? Will it be an individual (Executive Director, Director of Finance or Controller) or a group (Board of Directors or Audit Committee) Does your organization have an Audit Committee and, if not, would it make sense to create one?
2. What services do we need? Define your organization’s needs and create a list of required services. Getting clarity on exactly which services are needed will help ensure that you are comparing apples to apples at decision time.
3. When do we need these services? Consider your year-end deadlines, filing deadlines and scheduled meetings of the Board of Directors. How quickly after year-end do you close your books? When do you want the financial statements presented? You will need to communicate any timing expectations to prospective bidders.
4. Upon which criteria are we going to base this decision? Consider: prior experience with not-for-profits; organization, location, size and structure of the firm/individual; understanding of the work to be performed, including ability/plan to complete services according to the organization’s timeframes; experience of references; price; industry knowledge and approach to communications. Some organizations develop a weighting system to help ensure they are objective when making the decision.
5. What is our process and time frame for making a decision? Determine whether you are going to allow candidates to come onsite to meet with accounting staff or wait until you have received proposals and identified finalists for the decision-makers to interview—or both. Outline when you are going to issue a request for proposal, how long candidates have to ask questions or request an onsite visit, when candidates need to submit a proposal, when you expect to interview finalists, and when you expect to reach a decision.

Gone are the days of calling a couple of CPAs to say, “Give me a bid,” and reaching an agreement with a handshake. Today’s organizations need to be conscientious about their selection of a CPA. Conducting a diligent and thorough selection process not only satisfies key stakeholders, but ultimately helps protect the organization.

Barry Omahen, CPA, is the Managing Partner of Lindquist LLP, a certified public accounting firm specializing in audits of not-for-profit organizations and their related employee benefit plans. Barry’s chief responsibilities include supervising Lindquist LLP’s day-to-day operations and the firm’s quality control review process. Email Barry at bomahen@lindquistcpa.com.

Stephanie Kretschmer, Marketing Manager, helps the professionals in Lindquist LLP’s four West Coast offices attract and retain clients. She oversees firm communications and has responded to hundreds of requests for proposal in her career. Email Stephanie at skretschmer@lindquistcpa.com.

To learn more from Lindquist’s nonprofit-focused CPAs, watch the recorded webinar: “Beyond the Numbers- How to Review your Organization’s Form 990.”

Tip 10: Work with an Unemployment Trust.

Working with an unemployment trust like UST can provide you with a partner that works with you at every stage of the unemployment process. Whether you need help with unemployment claims, appeals, hearings, charge audits, best practices, unemployment reports or client education, a trust can help cut down on costs and administrative burden.

For example, UST helps nonprofits to:

1) Evaluate whether they should opt out of the state unemployment tax system

2) File the paperwork with the state to become a “reimbursing” employer

3) Set up an account reserve just for unemployment costs

4) Provide web reporting with the tools that help you stay abreast of unemployment activity

Unemployment trusts like UST can also offer guidance, preparation and representation at hearings to help you win a claims appeal for improper charges.

By working with the Trust’s claims monitor, especially at the initial level of the claim, an unemployment trust can help you avoid penalties, loss of appeal rights, and it can keep you from being charged for benefits improperly collected. Working with a trust can make the difference in saving your agency thousands of dollars in claims costs each year.

Trusts are best for nonprofits with 10 or more full time employees who have somewhat stable employment. Those with seasonable employees or volatile unemployment claims are best staying in the state unemployment tax system. Read more about your options as a nonprofit.

To find out if your agency would benefit from opting out of the state unemployment tax system and working with UST, request a Savings Evaluation today.

Tip 9: Consider re-employment strategies!

Helping transitioning employees find another job rapidly after a staff reduction, position elimination, or other involuntary, non-misconduct separation can help your nonprofit control the duration of non-protestable unemployment claims.

Because these claims typically result in the longest duration and highest total benefit payout, they can be the most costly for your organization.

An unemployment claims monitor or Trust can help you by providing one-on-one job coaching, e-learning, and other key outplacement elements

Tip 8: Weigh the consequences of partial employment, systematic layoffs, and independent contractors before you use them!

It should be self-evident, but too often employers act impulsively and don’t review all of their options before laying employees off, which ultimately raises their UI tax rates, or their cash on hand if they are a reimbursing employer. Layoffs can cost thousands of dollars in unemployment benefits.

Know when employees are eligible for partial weeks of unemployment, how a systematic layoff will affect your contribution rate, and whether independent contractors are a good idea for your agency.

In the case of layoffs, helping severed employees find jobs benefits the employer and employee.

Independent contractors may file for unemployment, and the employer needs to be able to prove he or she is not an employee of your company.

If you work with an unemployment trust or claims administrator, they can provide you with a listing of state-specific guidance that can highlight how helping severed employees find a new job will benefit both them and your nonprofit, as well as helping you properly document that independent contractors are not an employee.

Tip 7: Appeal benefit collections when it is warranted.

An appeal is your request to the state to assign a hearing officer to review the facts of a particular case because you believe the eligibility rules have not been properly applied. Appeals aren’t something you should do by default though.

Appeal only if you adamantly disagree with a decision allowing the claimant benefits, and be prepared to present the facts and evidence that show why your former employee should not be allowed to collect.

If you work with a claims administrator or unemployment trust, you should be prepared during an appeal to give all documentation and preparation to a hearings representative who will help your organization determine who should be contacted for the hearing, and how their testimony will work with your case.

Tip 6: Be prepared for hearings.

All unemployment benefits hearings require first-hand testimony as to the facts and events under consideration. By proactively documenting all employee actions and disciplines, you collect the information you will need for a hearing. By having all documents readily available during the hearing, you avoid relying on hearsay evidence which is generally not persuasive enough to win your hearing, and may not even be considered, depending on the case.

If you work with a claims administrator or a trust like UST, you may have access to your own hearing representative. Working with a hearing representative will also help you prepare for the case by providing you with someone who is not only on your side, but has many years of experience in working through claims hearings.

Tip 5: Know the difference between voluntary resignations, discharges, and lack of work claims.

In almost every state, a voluntary resignation, especially for non-compelling reasons, usually disqualifies the employee from receiving unemployment benefits.

But there are significant exceptions because some states may allow benefits for a quit with “good cause.”

Here are some good things to remember:

1. In a voluntary quit, the burden of proof rests with your former employee.
2. A discharge for misconduct is legally defined as willful misconduct connected with your work that resulted in a tendency for damage to your nonprofit interests.
3. A discharge in which you initiate the termination puts the burden of proof on your nonprofit. Make sure you have the right documentation on hand for at least 18 months.
4. Always avoid the words “unsatisfactory performance” in cases where the employee is able to perform the job, but is negligent of performing their duties. This term has a legal definition of an employee who is unable to perform the job, and will likely result in benefits awarded to the claimant.
5. In discharges due to misconduct, be prepared to provide documentation of the final incident that led to the discharge.

And never, ever forget, lack of work claims are the very reason unemployment insurance exists. They provide benefits to employees who, through no fault of their own, are separated from work. But to get any award, claimants must be able to work, available for work, and actively looking for work.

Tip 4: Track unemployment costs and budget appropriately.

Track claims, monitor potential liability and review past history to forecast budgets for unemployment taxes. Be familiar with the base period and benefit year in your state and review tax information to ensure budgets are adequate. By better understanding how your unemployment tax costs are affected by layoffs, you can plan for the future and make sure you have the cash on hand for fluctuations in staffing that may affect your future costs.

If you are a reimbursing employer, meaning you have opted out of the state unemployment tax system to reimburse the state for your own UI claims, you should very carefully manage unemployment claims and make sure you aren’t paying for any that are unwarranted. Also, you can catch errors by the state if you know how much you should be paying. If you work with a trust like UST, your claims representative should be doing this for you and will be able to walk you through any questions.

Even if your nonprofit doesn’t have a dedicated human resources team, it’s important that your human resources practices are up to snuff. Best practices include:

• Performing detailed reference checks before hiring new employees.
• Consistently using (and documenting) progressive discipline.
• Enforcing all rules and policies uniformly. Even the smallest deviations undermine your credibility as a fair nonprofit employer.
• Follow an employee’s progress from the moment they are hired.
• Perform thorough talent assessments before hiring or promoting employees to alleviate problems down the road.

There are online performance assessment tools that you can use to help screen employees before hire, and assess after hire. For example, UST members have access to pan, an online aggregation of hundreds of assessments from more than 50 of the industry’s top test publishers. These online assessments include employee acquisition, evaluation, and development solutions to help reduce costs in the hiring and recruiting process for UST members, as well as decrease turnover and its related costs.

Tip 2:  Compose effective written warnings.

Every manager, HR generalist, and employee from here to Timbuktu knows that warnings are an act of progressive discipline. But what many of these same people fail to remember is that warnings are an act of progressive discipline that effectively ensure an employee understands what is expected of them.

In the case of an employee discharge, state unemployment agencies look for warnings to determine if your former employee was discharged for misconduct. Effectively clear, and non-judgmental, warnings help you meet this burden of proof with concrete evidence, when written to include:

• The violation
• The action that must take place for the situation to improve
• The consequences to the employee if this standard is not met
• The employee’s action plan and comments
• The signature of the employee, a witness, and the issuer