If You Choose the Reimbursement Option for Payment of Unemployment

Because the reimbursement method of financing operates differently than the contributing (tax-rated) method, it is very important that you understand the implications of your choice.

Unemployment benefits are based on wages paid to a former worker (claimant) during the first four of the last five completed calendar quarters (base period) preceding the claim for benefits. When a claim is filed, a maximum amount of benefits and a maximum amount of time in which to draw those benefits is established. The claim is in effect for one (1) year. Under the reimbursement method of financing you, the Employer, will be responsible to repay Job Service North Dakota quarterly for all benefit payments made to former workers whose benefits were based on wages paid by your organization. (Advanced Reimbursement employers pay a fixed percentage of total payroll each quarter to create a reserve from which these quarterly billings are paid.) It is, therefore, possible that a claimant could receive benefits that would result in a charge to your account as the Employer for a period lasting up to two and a half years subsequent to his/her last working for you.

ALL benefits paid are charged against your account in the amount of the percentage of base period wages paid by you. This includes charges that would not necessarily have been charged to an employer with a contributing (tax-rated) account (NDCC § 52-04-07 allows for the non-charging of employer accounts in some situations BUT specifically disallows it in the case of employers whose benefits are financed under the reimbursement method).

Some examples of situations in which benefits will be charged to your account include the following:

  • A claimant was originally disqualified, later overcame that disqualification and was paid benefits;
  • A claimant was paid because a determination of eligibility allowed payment of benefits, and the determination was later reversed as a result of a subsequent decision. If the reversal decision results in a determination that establishes an overpayment and if the overpayment can be collected from the claimant, your account will be credited accordingly; or,
  • A claimant is receiving benefits based on earnings from a primary job with another employer and a part-time job with you and continues to work the part-time job with you.

NDCC § 52-04-18 (3) provides that "If any nonprofit organization is delinquent in making payments in lieu of contributions as required..., the bureau may terminate such organization's election to make payments in lieu of contributions as of the beginning of the next taxable year, and such termination is effective for that and the next taxable year." If your reimbursement election is terminated under this provision because you are delinquent in making payments, you will be required to finance benefits under the contributing (tax-rated) method.

An employer may change from one financing method to another at the beginning of any calendar year by filing a written notice with Job Service not later than 30 days prior to the beginning of the year. Should you change from the reimbursement method to the contributing (tax-rated) method, you will remain liable for reimbursement of benefits paid which are based on wages paid before the change.

An employer who changes from the contributing (tax-rated) method to the reimbursement method may not change back to the contributing (tax-rated) method for two years.