2023 New Mexico Statutes › Chapter 51 - Unemployment Compensation › Article 1 - Unemployment Compensation › Section 51-1-13 - Financing benefits paid to employees of nonprofit organizations.

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 Paragraph (8) of Subsection F of Section 51-1-42 NMSA 1978.
A. Any nonprofit organization that, pursuant to Paragraph (8) of Subsection F of Section 51-1-42 NMSA 1978, is subject to the Unemployment Compensation Law shall pay contributions in accordance with the provisions of Section 51-1-9 NMSA 1978, unless it elects, in accordance with this subsection, to pay to the division for the fund an amount equal to the amount of regular benefits and of one-half of the extended benefits paid, that is attributable to service in the employ of such nonprofit organization, to individuals for weeks of unemployment that begin during the effective period of such election.
(1) Any nonprofit organization that becomes subject to the Unemployment Compensation Law after January 1, 1972 may elect to become liable for payments in lieu of contributions for a period of not less than two taxable years by filing a written notice of its election with the division not later than thirty days immediately following the date subjectivity is determined.
(2) Any nonprofit organization that makes an election in accordance with Paragraph (1) of this subsection will continue to be liable for payments in lieu of contributions until it files with the division a written notice terminating its election not later than thirty days prior to the beginning of the taxable year for which such termination shall first be effective.
(3) Any nonprofit organization that has been paying contributions under the Unemployment Compensation Law may change to a reimbursable basis by filing with the division written notice of its election not later than thirty days prior to the beginning of the taxable year for which its election shall first be effective. Such election shall not be terminated by the organization for the following two taxable years.
(4) The division, in accordance with such regulations as the secretary may prescribe, shall notify each nonprofit organization of any determination that it may make of the organization's status as an employer and of the effective date of any election that the organization makes and of any termination of such election. Such determination shall be subject to reconsideration, appeal and review in accordance with regulations of the secretary governing appeals by employers of their liability under Section 51-1-9 NMSA 1978.
B. Payments in lieu of contributions shall be made in accordance with the provisions of this subsection.
(1) At the end of each calendar quarter or at the end of any other period as determined by the secretary, the division shall bill each nonprofit organization or group of such organizations that has elected to make payments in lieu of contributions for an amount equal to the full amount of regular benefits plus one-half of the amount of extended benefits paid during such quarter or other prescribed period that is attributable to service in the employ of such organization.
(2) Effective with the calendar quarter beginning January 1, 1987 and each succeeding calendar quarter, each employer that is liable for payments in lieu of contributions, including governmental entities, shall pay to the division an amount equal to twenty-five percent of the total benefit charges made to each such employer during the four calendar quarters ending the preceding June 30. Such payments shall be made on or before the tenth day of the first month of each calendar quarter.
(3) In the event that any employer liable for making payments in lieu of contributions incurred no benefit charges during the four calendar quarters ending the preceding June 30, the employer shall pay to the division, each calendar quarter, an amount equal to one-eighth of one percent of the employer's annual taxable wages paid for such period for employment as defined in Subsection F of Section 51-1-42 NMSA 1978 and Section 51-1-44 NMSA 1978 as estimated by the secretary. Such payments shall be paid on or before the tenth day of the first month of the calendar quarter.
(4) For each calendar quarter, the secretary shall determine the amount paid by each employer subject to payment in lieu of contributions and the amount of benefits charged to such employer. Each employer who has made payments in an amount less than the amount of benefits charged to the employer shall pay the balance of the amount charged within twenty-five days of the notification by the division. If the quarterly payment made by an employer pursuant to Paragraph (2) of this subsection exceeds the amount of benefits charged to such employer, the excess payment shall be refunded on a quarterly basis.
(5) Payments made by any nonprofit organization under the provisions of this subsection shall not be deducted or deductible, in whole or in part, from the remuneration of individuals in the employ of the organization.
C. Collection of past due payments of amounts in lieu of contributions shall be as provided in this subsection.
(1) Past due payments of amounts in lieu of contributions are subject to the same penalties that are applied to past due contributions pursuant to Section 51-1-12 NMSA 1978.
(2) The provisions of Section 51-1-36 NMSA 1978 shall apply to all contributions or payments of amounts in lieu of contributions for which a nonprofit organization becomes liable pursuant to an election made pursuant to Subsection A of this section.
(3) Any nonprofit organization that elects to become liable for payments in lieu of contributions shall be required, within thirty days after the effective date of its election, to execute and file with the secretary a surety bond or such other surety undertaking or security, which may consist of a cash security deposit, in a form approved by the secretary. With the consent of the secretary, a cash security deposit may be made in three annual installments. This paragraph shall not apply to:
(a) group accounts established pursuant to Subsection E of this section or any member of such a group account; or
(b) governmental entities as defined in Subsection B of Section 51-1-44 NMSA 1978; except that all instrumentalities of governmental entities shall be included as part of the controlling governmental entity or entities for purposes of determining liability for the payment of unemployment compensation contributions.
(4) The amount of the surety bond or other surety undertaking or security required by Paragraph (3) of this subsection shall be equal to 2.7 percent of contribution times the organization's taxable wages paid for employment, as defined in Subsection F of Section 51-1-42 NMSA 1978 and Section 51-1-44 NMSA 1978, for the four calendar quarters immediately preceding the effective date of the election. If the nonprofit organization did not pay wages in each of the preceding four calendar quarters, the amount of surety bond required shall be determined by the secretary based upon an estimate of taxable wages to be paid during the succeeding four calendar quarters. Thereafter, the amount of the surety bond shall be adjusted on the basis of the organization's actual taxable payroll.
(5) If any nonprofit organization that is not required to execute and file a surety bond or other security is delinquent in making payments in lieu of contributions as required pursuant to Subsection B of this section or if any nonprofit organization that is required to execute and maintain a surety bond or other security fails to do so or is delinquent in making payments as required pursuant to Subsection B of this section, the secretary may terminate the organization's election to make payments in lieu of contributions effective as of the beginning of the next taxable year and the termination shall be effective until the organization executes and files with the department a surety bond or other security as required.
(6) Any bond or other surety undertaking or security required 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 secretary at such times as the secretary may prescribe.
D. Each employer who is liable for payments in lieu of contributions shall pay to the division for the fund the amount of regular benefits plus the amount of one-half of extended benefits paid that are attributable to service in the employ of that employer in accordance with the provisions of Subsection A of Section 51-1-11 NMSA 1978, except that any employer that is liable for payments in lieu of contributions shall not be relieved of charges for benefits paid to an individual who was separated from the employ of that employer for any reason.
E. Two or more employers who have become liable for payments in lieu of contributions, in accordance with the provisions of Subsection A of this section, Subsection B of Section 51-1-14 NMSA 1978 and Section 51-1-16 NMSA 1978, may file a joint application 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 employers. Each application shall identify and authorize a group representative to act as the group's agent for the purpose of this subsection. Upon its approval of the application, the division shall establish a group account for the employers effective as of the beginning of the calendar quarter in which it receives the application and shall notify the group's representative of the effective date of the account. The account shall remain in effect for not less than two years and thereafter until terminated at the discretion of the secretary or upon application by the group. Each group account shall be liable for the prepayment of payments in lieu of contributions as provided in Paragraphs (2), (3) and (4) of Subsection B of this section. Each member of the group account shall be liable to the division 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 the 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 for such member during the quarter bear to the total wages paid during the quarter for service performed in the employ of all members of the group. The secretary shall prescribe regulations as the secretary 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 the 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 payments.
F. Each group account may apportion liability for amounts due to the group representative as the group shall determine.
History:
1953 Comp., § 59-9-7.4, enacted by Laws 1971, ch. 209, § 4; 1973, ch. 216, § 3; 1975, ch. 351, § 3; 1977, ch. 321, § 4; 1979, ch. 280, § 20; 1981, ch. 354, § 8; 1987, ch. 63, § 3; 1991, ch. 122, § 8; 2013, ch. 133, § 4.
ANNOTATIONS
The 2013 amendment,
effective January 1, 2015, provided for reconciling the contributions and benefits charged to employers; in Paragraph (4) of Subsection B, in the first sentence, after "benefits charged to such", deleted "employer's account" and added "employer", in the second sentence, after "benefits charged to the", deleted "employer's account" and added "employer", and in the third sentence, after "benefits charged to such", deleted "employer's account" and added "employer".
The 1991 amendment,
effective April 3, 1991, substituted "division" for "department" throughout the section; deleted "unemployment" preceding "fund" in the first sentence in Subsection A; in Paragraph (3) of Subsection B, substituted "one-eighth" for "one-fourth" preceding "of one percent" in the first sentence and deleted the former second sentence, which read "If such employer has had employment subject to benefit charges for a period of three years ending on the preceding June 30, but has incurred no benefit charges during the same three-year period, such employer shall pay to the department, each calendar quarter, an amount equal to one-eighth of one percent of the employer's annual taxable wages as estimated by the secretary"; in Paragraph (4) of Subsection B, substituted "quarter" for "year" near the beginning of the first sentence and rewrote the final sentence, which read "If the total payments made by an employer exceed the amount of benefits charged to such employer's account, the excess payments shall be credited as partial payment against future payments due or, if requested by the employer, shall be refunded"; and made minor stylistic changes.
Exemption from payment of contributions by charitable corporations
was to be liberally construed; exemption was determined by use of property and not by declared objects and purposes of its owner; in ascertaining whether lodge was exempt, fact that half of its income was consumed in operating expenses was of no consequence; finding that lodge was organized and operated exclusively for charitable purposes was supported by evidence that the half of its income not needed for operating expenses was spent for charities and that its bar, reading room and bowling alley were conducive to attendance and helped produce funds which were expended for charity.
Santa Fe Lodge No. 460 v. Employment Sec. Comm'n
, 1945-NMSC-022, 49 N.M. 149, 159 P.2d 312.
Determination of member's liability to group account.
— The formula contained in Subsection E did not apply where the membership of a group member was terminated but the group itself had not sought termination of its account with the department; instead, Subsection B was applied to determine the amount of the group member's liability to the group account.
New Mexico Hosp. Ass'n v. A.T. & S.F. Mem'l Hosps.
, 1987-NMSC-017, 105 N.M. 508, 734 P.2d 748.
Am. Jur. 2d, A.L.R. and C.J.S. references.
— 76 Am. Jur. 2d Unemployment Compensation § 40.
81 C.J.S. Social Security and Public Welfare §§ 182, 205.