Section 14A: Nonprofit organizations and governmental employers
Section 14A. Benefits paid to employees of nonprofit organizations shall be financed in accordance with the provisions of this section. For the purpose of this section, a nonprofit organization is an organization, or group of organizations, described in section 501(c)(3) of the United States Internal Revenue Code which is exempt from income tax under section 501(a) of such Code.
(a) Any nonprofit organization which, pursuant to subsection (d) of section four A, is or becomes subject to this chapter on or after January first, nineteen hundred and seventy-two, shall pay contributions under the provisions of section fourteen, unless it elects, in accordance with this subsection, to pay into the Unemployment Compensation Fund the amount equal to the amount of benefits, including dependency benefits, paid under any provision of this chapter to individuals for weeks of unemployment in a benefit year which begins during the effective period of such election and in any eligibility period, as defined in paragraph (j) of subsection (1) of section thirty A, applicable to such benefit year, to the extent that such benefits are attributable to service in the employ of such employer, and are not reimbursable by funds made available under any act of Congress.
Any governmental employer which, pursuant to subsection (a) of section four A, is or becomes subject to this chapter on or after January first, nineteen hundred and seventy-eight, shall pay contributions under the provisions of section fourteen C unless it elects to make payment in lieu of contributions in accordance with the provisions of this section. If such governmental employer elects to make payments under this section, it shall make payments in the manner described in the first paragraph of this subsection. In order to implement the provisions of section four A, whenever any political subdivision of the commonwealth or any instrumentality thereof, or any instrumentality of one or more such subdivisions, elects to make payment in lieu of contributions in accordance with the provisions of this section, the treasurer thereof, upon certification to the board of assessors, shall expend available funds in order to make said payments.
(1) Any nonprofit organization which is subject to this chapter on December thirty-first, nineteen hundred and seventy-one may elect to become liable for payments in lieu of contributions for a period of not less than one calendar year beginning with January first, nineteen hundred and seventy-two provided it files with the commissioner a written notice of its election within the thirty day period immediately following such date.
Any governmental employer which is subject to this chapter on or after January first, nineteen hundred and seventy-eight may elect to pay contributions under the provisions of section fourteen C or to make payments in lieu of contributions under this section for a period of not less than two calendar years beginning with January first, nineteen hundred and seventy-eight provided it files with the commissioner a written notice of its election within the thirty-day period immediately preceding such date.
(2) Any nonprofit organization which becomes subject to this chapter on or after January first, nineteen hundred and seventy-two may elect to become liable for payments in lieu of contributions for a minimum period commencing with the date of subjectivity and ending on December thirty-first of that calendar year, by filing a written notice of its election with the commissioner not later than thirty days immediately following the date of the determination of such subjectivity.
Any governmental employer which becomes subject to this chapter on or after January first, nineteen hundred and seventy-eight may elect to become liable for payments in lieu of contributions for a minimum period of two years commencing with the date of subjectivity and ending on December thirty-first of the following calendar year by filing a written notice of its election with the commissioner not later than thirty days immediately following the determination of such subjectivity.
(3) Any nonprofit organization which makes an election in accordance with paragraph (1) or (2) of this subsection will continue to be liable for payments in lieu of contributions until it files with the commissioner a written notice terminating its election not later than thirty days prior to the end of the election period, or not later than thirty days prior to the beginning of any subsequent calendar year. Any nonprofit organization which has terminated its election shall thereafter pay contributions under the provisions of section fourteen for a minimum period of two calendar years.
Any subsequent election as to the method of financing benefit payments in accordance with section fourteen or section fourteen A shall not be terminable by the organization for two calendar years.
Any governmental employer which makes an election in accordance with paragraphs (1) and (2) shall continue to be liable for payments in lieu of contributions until it files with the commissioner a written notice terminating its election prior to the end of the election period, or not later than December thirty-first prior to the beginning of any subsequent calendar year. Any governmental employer which has terminated its election shall thereafter pay contributions under the provisions of section fourteen C for a minimum period of two calendar years. Any subsequent election as to the method of financing benefit payments in accordance with section fourteen A or section fourteen C shall not be terminable by such employer for two calendar years.
(4) Any nonprofit organization which has been paying contributions under this chapter for a period subsequent to January first, nineteen hundred and seventy-two may change to a reimbursable basis by filing with the commissioner not later than thirty days prior to the beginning of any calendar year a written notice of election to become liable for payments in lieu of contributions. Such election shall not be terminable by the organization for that year and the ensuing calendar year. Any subsequent election or change from payments in lieu of contributions to payment of contributions under section fourteen, or from payment of contributions under section fourteen to payments in lieu of contributions, shall not be terminable by the organization for two calendar years.
(5) The commissioner may for good cause extend the period within which a notice of election, or a notice of termination, shall be filed and may permit an election to be retroactive but not earlier than January first of the calendar year immediately preceding the date said notice was filed.
(6) The commissioner, in accordance with such regulations as he may prescribe, shall notify each nonprofit organization or governmental employer of any determination which he may make of the effective date of any election which it makes and of any termination of such election. Such determinations shall be subject to review in accordance with the provisions of paragraph (2) of subsection (b) of this section.
(b) Payments in lieu of contributions shall be made in accordance with the provisions of this subsection as follows:
(1) At the end of each calendar quarter, or at the end of any other period as determined by the commissioner, the commissioner shall bill each nonprofit organization or governmental employer, or group of such organizations or employers, which has elected to make payments in lieu of contributions for an amount equal to the full amount of benefits, including dependency benefits, paid under any provision of this chapter, to the extent that such benefits are attributable to service in the employ of such employer, and are not reimbursable by funds made available under any act of Congress.
(2) Payment of any bill rendered under paragraph (1) of this subsection shall be made not later than thirty days after such bill was mailed to the last known address of the nonprofit organization or governmental employer or was otherwise delivered to it, unless, not later than thirty days after the bill was mailed to its last known address or otherwise delivered to it, the organization or governmental employer files an application for review by the commissioner, setting forth the grounds for such application. The commissioner shall promptly review and reconsider the determination. Thereafter, notice of his decision shall be mailed to the employer and this decision shall be final.
(3) Any employer who has elected to make payments in lieu of contributions pursuant to this section shall pay the full amount of benefits, including dependency benefits, included on any bill rendered under paragraph (1) even if the determination or decision to pay benefits is subsequently modified or reversed. If the determination or decision to pay benefits is subsequently modified or reversed, the commissioner shall credit such employers account only if and to the extent that a restitution of the amounts erroneously paid is made.
(c) Payments made by any nonprofit organization or governmental employer under the provisions of this section shall not be deducted or deductible, in whole or in part, from the remuneration of individuals in the employ of the organization or governmental employer.
(d) Past due payments of amounts in lieu of contributions shall be subject to the same interest and penalties that, pursuant to section fifteen, apply to past due contributions.
(e) In the discretion of the commissioner, any nonprofit organization that elects to become liable for payments in lieu of contributions may be required within thirty days after the effective date of its election, to execute and file with the commissioner a surety bond approved by him. The maximum amount of such surety bond shall not exceed a percentage of the employer's taxable payroll equal to the maximum rate that any employer, who is liable for contributions during the year in question would have to pay under the provisions of section fourteen of this chapter.
(1) Any bond deposited under this subsection shall be in force for a period of not less than two taxable years and shall be renewed with the approval of the commissioner, at such times as the commissioner may prescribe, but not less frequently than at two year intervals as long as the organization continues to be liable for payments in lieu of contributions. The commissioner shall require adjustments to be made in a previously filed bond as he deems appropriate. If the bond is to be increased, the adjusted bond shall be filed by the organization within thirty days of the date notice of the required adjustment was mailed or otherwise delivered to it. Failure by any organization covered by such bond to pay the full amount of payments in lieu of contributions when due, together with any applicable interest and penalties provided for in this section, shall render the surety liable on said bond to the extent of the bond, as though the surety was such organization.
(2) If any nonprofit organization fails to file a bond or to file a bond in an increased amount as provided under this subsection, the commissioner may terminate such organization's election to make payments in lieu of contributions and such termination shall continue for a period commencing with the quarter in which the election is terminated and continuing through the ensuing calendar year, provided that the commissioner may extend for good cause the applicable filing period by not more than thirty days.
(f) Benefits paid to an individual shall be charged to the accounts of base period employers, whether such employers are liable for contributions under the provisions of section fourteen or section fourteen C or liable for payments in lieu of contributions, in the same sequence as provided in subsection (d) of section fourteen. Benefits, including dependency benefits, paid to any individual for service in the employ of a base period employer which has elected to make payments in lieu of contributions, and are not reimbursable by funds made available under any act of Congress, shall not be charged to any solvency account but shall be charged to the account of the base period employer.
(g) Two or more nonprofit organizations or governmental employers that have become liable for payments in lieu of contributions may file a joint application to the commissioner for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of such organizations or governmental employers. Each such application shall identify and authorize a group representative to act as the group's agent for the purposes of this subsection. Upon his approval of the application, the commissioner shall establish a group account for such organizations or governmental employers effective as of the beginning of the calendar quarter in which he receives the application and shall notify the group's representative of the effective date of the account. Such account shall remain in effect for not less than two years and thereafter until terminated at the discretion of the commissioner or upon application by the group. Upon establishment of the account, each member of the group shall be liable for payments in lieu of contributions with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in such quarter that are attributable to service performed in the employ of all members of the group as the total wages paid for service in employment by such member in such quarter bear to the total wages paid during such quarter for service performed in the employ of all members of the group. The commissioner shall prescribe such regulations as he deems necessary with respect to applications for establishment, maintenance and termination of group accounts that are authorized by this subsection, for addition of new members to, and withdrawal of active members from, such accounts, and for the determination of the amounts that are payable under this subsection by members of the group and the time and manner of such payments.
(h) Notwithstanding any provisions in this section, any nonprofit organization that prior to January first, nineteen hundred and sixty-nine, paid contributions required under section fourteen, and, pursuant to this section, elected before April first, nineteen hundred and seventy-two to make payments in lieu of contributions, shall not be required to make any such payment on account of any benefits, including dependency benefits, paid under any provision of this chapter, to the extent that such benefits are attributable to service in the employ of such employer, and are not reimbursable by funds made available under any act of Congress, to individuals for weeks of unemployment which began on or after the effective date of such election until the amount of such benefits equals the amount of the positive balance in the experience rating of such organization.
(i) Any employer which elects to make payments in lieu of contributions into the Unemployment Compensation Fund as provided in this section shall not be liable to make such payments with respect to the benefits paid to any individual whose base period wages include wages for previously uncovered services as defined in section one A to the extent that the Unemployment Compensation Fund is reimbursed for such benefits pursuant to section 121 of P.L. 94–566.
(j) Notwithstanding any other provisions of this chapter, any nonprofit educational institution or educational institutions which are not institutions of higher education, that prior to October twentieth, nineteen hundred and seventy-six, paid contributions required by section fourteen, and elects within thirty days after the effective date of this subsection to make payments in lieu of contributions, shall not be required to make such payment on account of any benefits, including dependency benefits, paid under any provision of this chapter, to the extent that such benefits are attributable to service in the employ of such employer, and are not reimbursable by funds made available under any act of Congress, to individuals for weeks of unemployment which began on or after the effective date of such election until the amount of such benefits equals the amount of the positive balance in the experience rating of such educational institution or educational institutions.