Who pays for unemployment insurance?
The unemployment insurance program is operated on general insurance principles wherein the employer pays the contributions (taxes) into the Utah Unemployment Compensation Fund (trust fund) to sustain the program. Governmental units, Indian Tribal units, and nonprofit organizations have the option to: (1) pay contributions into the fund based upon payroll wages in the same manner as other employers, or (2) elect to become reimbursable employers which are liable for direct reimbursement to the trust fund for benefits paid to individuals formerly in their employ in lieu of quarterly contributions. (See the Nonprofit and Governmental Employers Handbook.) The term nonprofit organization refers only to organizations exempt from income tax as described in Section 501(c)(3) of the Internal Revenue Code. These are organizations operated exclusively for religious, charitable or educational purposes. This Department requires a copy of the Internal Revenue Service letter of exemption, 501(c)(3), i
The unemployment insurance program is operated on general insurance principles wherein the employer pays the premium, with the exception of the reimbursable employers who are self-insured and, therefore, reimburse the Department for benefits actually paid to former employees. Government units and nonprofit organizations pay contributions into the Utah Unemployment Compensation Fund (Trust Fund) based upon payroll wages in the same manner as contributory employers, unless they elect to become reimbursable employers which are liable for payments in lieu of contributions. The terms “liable for payments in lieu of contributions” as referred to in the Act and “liable for benefits paid” as used in this handbook have the same meaning. Therefore, government units and nonprofit organizations which elect to become a reimbursable employer pay to the Department an amount equal to the benefits paid to former employees. These payments are due and payable monthly. Nonprofit and government employers d
