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Coverage and Liability for Non-Profit Organizations

This page is based on a pamphlet produced for employers. If you would like a copy of this pamphlet or have questions please call the number listed below.

Employer Coverage and Liability for Non-Profit Organizations
Wisconsin Unemployment Insurance - Chapter 108 Wisconsin Statutes

Introduction  (Return to Top)

This pamphlet provides information for new nonprofit employers about the coverage and liability provisions of the Wisconsin Unemployment Insurance (UI) Law.

Wisconsin's UI law provides benefits to covered workers who are out-of-work and eligible.  These benefits are financed by employers who are subject to the state UI laws.

Certain nonprofit organizations may finance their benefit costs on a tax or direct reimbursement basis.

Which Organizations Are Considered "Non-Profit" for UI Purposes?  (Return to Top)

A nonprofit organization is an organization described in Section 501(c)(3) of the Internal Revenue Code. (e.g. religious, charitable, educational organizations).  A copy of the determination issued to the organization by the Federal Government establishing this status must be submitted to this department if you wish to be considered a nonprofit organization for UI purposes.

Does Our Organization Have a UI Obligation?  (Return to Top)

A nonprofit organization is subject if it has four or more employees working on the same day in 20 different weeks during a calendar year.

What Is Reimbursement Financing?  (Return to Top)

Nonprofit organizations which are subject may remain under tax financing or change to reimbursement financing.  Under reimbursement financing you pay to the state the entire amount of any unemployment benefits paid rather than a quarterly tax.   Billing is done on a monthly basis.

How Does My Organization Obtain Reimbursement Financing?  (Return to Top)

Whenever a new UI account is established for a nonprofit employer a form to elect reimbursement financing is enclosed with the determination letter.  This election form must be returned to this department within 30 days of the date of the determination letter.  An assurance of reimbursement must also be provided to this department.

What Is An Assurance of Reimbursement?  (Return to Top)

In order to complete any election of reimbursement financing an assurance must be filed with the Treasurer of the Wisconsin Unemployment Reserve Fund to guarantee payments required under the reimbursement account.  The assurance can be in the form of a surety bond, letter of credit, certificate of deposit or a passbook.  The amount of the assurance must be equal to 4% of the employer's taxable yearly payroll.  It must be received by this department within 60 days of the date on which we receive your form electing reimbursement financing.

Who Is Considered An Employee for UI Purposes  (Return to Top)

The term "employee" means any individual who is or has been performing service for an employing unit for pay.  Under the UI law it is presumed that every person performing service for pay is an employee unless the employing unit satisfies the department that both of the following conditions are met:

1. The individual is free from the employing units' direction and control, not only under the terms of any written contract, but also in the day to day performance of services; and
2. Such services have been performed in an independently established trade, business or profession in which the person is customarily engaged.

Is There Any Employment Which Is Excluded for UI Purposes?  (Return to Top)

Individuals performing services in certain types of employment are specifically excluded from covered employment.  Being excluded means that the employer does not pay tax based on those earnings and their employees are not eligible for UI benefits.   Examples of excluded employment are:

• Employee of a church or convention or association of churches.
• Employee of an organization operated primarily for religious purposes and operated, supervised, controlled, or principally supported by a church.
• Minister or member of a religious order exercising required religious duties.
• Individuals receiving rehabilitation and remunerated work in a facility conducted for that purpose.
• Individuals receiving government financed work relief or work training.
• Student performing services as a formal and accredited part of a work-study program certified to the employer by the school.

How Do I Get A Wisconsin UI Account Number?  (Return to Top)

Contact the department by mail or telephone.  The appropriate form (application) will be mailed to you.  Information supplied by you will be used to determine if you have a liability.  If you do, you will be provided forms and instructions on quarterly reporting.

How Are UI Taxes Paid?  (Return to Top)

Each employer subject to the UI law must file a quarterly Contribution and Wage report.   The report, and payment if on tax financing, is due by the close of the month following the end of a calendar quarter on forms supplied by the department.  The due dates for each report are:

First Quarter - April 30
Second Quarter - July 31
Third Quarter - October 31
Fourth Quarter - January 31

What If I Have Other Questions About My Coverage and Liability?  (Return to Top)

You may write to us at the:

Unemployment Insurance Division
P.O. Box 7942
Madison, WI 53707-7942

Or you may call:

Employer Service Team
(608) 261-6700
FAX (608) 267-1400

Information based from publication document identification number UCT-9438-P(N.07/92)

Updated July 14, 2009
Division of Unemployment Insurance, Bureau of Tax and Accounting
Content Contact: Tax & Accounting Staff

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