Certain organizations in Oregon are exempt from unemployment insurance tax, however they are still obligated to provide unemployment compensation to eligible former employees. If taxes are not paid by the exempt employer then they must fully reimburse the Oregon Unemployment Compensation Trust Fund as claims arise from former employees. The Oregon Employment Department requires a down payment as a guarantee that some funds may go towards reimbursing the payout of unemployment benefits and this trust fund bond is acceptable in lieu of providing the down payment.
Exempt organizations can pay the tax directly into the fund as all other businesses do. Also, they may choose to self insure for unemployment benefits or provide a letter of credit from a bank guaranteeing necessary funding for the full deposit amount required which is two percent of the prior year’s total wages.
If the bonding route is taken, the bond must be kept active by renewing the bond every two years. Failure to do so may result in the Employment Department enforcing taxes to be paid thus funding the program.
The non-profit organization is liable to pay all unemployment benefits and failure to do so will result in an action against the bond. Surety carriers and Jet are not in the business of making unemployment payments, so that would result in the cancellation of the bond following the payout. Strict criteria is needed to determine if a non-profit would be eligible for this bond by Jet. Please call our office at 855-296-2663 to start the process of eligibility.
Per Oregon Statutes ORS 657.505, the amount of bonding needed should be 2% of the total wages paid for the prior year. The bond must be active for two years at which point the employment department will review if the bond amount must be adjusted.
The original signed and sealed bond form must be submitted to the following address:
State of Oregon Employment Department
875 Union St. NE
Salem, OR 97311