Unemployment Laws and Nonprofits
Unemployment insurance is an important part of the social safety net that helps workers who have been laid off or terminated without cause to transition into new jobs by providing them with limited, temporary financial assistance. The Division of Employment Security at the NC Department of Commerce manages North Carolina’s unemployment system.
Here is some basic information about how the state’s unemployment system affects nonprofits.
Workers' Compensation Changes for Small Nonprofits
At the Center’s recommendation, both the House and Senate included a provision in their regulatory reform bills that could save money for many small nonprofits with fewer than three employees. Under state law, any employer with three or more employees is required to purchase workers’ compensation insurance. The definition of “employee” in the current law includes nonprofit board officers, meaning that small nonprofits with three or more board officers (i.e. almost all nonprofits) are required to take on an often unnecessary expense.
Expanding Charitable Deduction Could Help Nonprofits and Businesses
In 2011, the N.C. House of Representatives overwhelmingly passed H.B. 886, which would bring the North Carolina corporate tax deduction for charitable contributions into conformance with federal law. This would help more small businesses contribute to nonprofits. The N.C. Center for Nonprofits encourages the N.C. Senate to pass this bill during the 2012 short session.
Nonpartisan Voter Education
An Essential Role for Nonprofits
Why should your nonprofit get involved?
- It strengthens your nonprofit’s voice. Elected officials know who votes. They pay less attention to communities with low voter turnout.
Worker Misclassification and Nonprofits
The N.C. General Assembly is considering a bill (H.B. 482) that would create new penalties for nonprofits and businesses that improperly classify their workers as independent contractors rather than employees. Nonprofits that misclassify their employees and fail to provide benefits such as workers’ compensation or unemployment insurance benefits could face fines ($1,000 per misclassified worker) and could be barred from state contracts for five years.
Nonprofits and tax reform
The General Assembly is in the final stages of its efforts to restructure North Carolina's tax system. The House and Senate are considering different version of legislation (H.B. 998) to lower tax rates and simplify the state tax system. It is essential that tax reform not harm nonprofits. Specifically:
Nonprofit annual reports
A bill (S.362) filed in the NC Senate would create a new annual filing requirement for nonprofits that are incorporated in North Carolina. Main requirements of the bill include:
Bills Would Create Studies of Property Tax Exemption and PILOTs
State Budget 2016
On May 19, the House of Representatives gave final approval to its version of the state budget (H.B. 1030) for FY 2016-17. Overall, the House budget, which passed with a 103-12 vote, would maintain or increase most state funding for nonprofits. Some highlights for nonprofits include: