I heard a story on Friday from the president of a large suburban youth soccer association that made me realize that some types of organizations may not understand their obligations to pay state unemployment insurance.
While it seems so simple to most business owners, the non-profit youth soccer association never realized they should have been paying unemployment insurance on their 3 employees. All the officers and directors of the non-profit youth soccer association are parents of young kids playing soccer in their club. Every year the officers and directors of the association are reelected, and until this last year the club I am referring to had never had a business owner on the board of directors.
The association has 3 employees. One is full-time; the other two are part-time and seasonal. The full time employee is the association’s paid manager. The two part-time seasonal employees are grounds keepers.
The association was formed five years ago when a generous land owner donated 25 acres of prime suburban real estate to the association for soccer fields to be built. This suburb has about 500 kids that play soccer about nine months of the year. When the association raised enough money to build their fields four years ago they hired the employees. Last year after the association was in its fifth year of operation the board of directors found it necessary to terminate the full-time business manager for cause. The business owner on the board of directors realized at that time that the association had never been paying unemployment insurance.
As fate would have it, the terminated employee filed for unemployment benefits immediately. The business owner (now association president) decided the best course of action was to approach the unemployment agency in the state and disclose that they had discovered that they were not paying unemployment insurance for five years.
The state unemployment insurance fund demanded immediate payment for all 5 years of premiums that would have been due, plus they wanted to fine the non-profit youth soccer association $10,000 in fines for failing to pay the required unemployment insurance.
The matter is being resolved this week with the association paying the fine out over time and the past due (and current unemployment insurance premiums) being paid immediately.
This soccer club is about two months into its spring season. The association board had to ask the parents of each child playing soccer to pay an extra $40 for this season to cover the past due unemployment insurance. That meant each child’s spring soccer dues went from $80 per season to $120. For a family with multiple children this additional cost has become a burden.
Clearly this non-profit youth soccer club with boards of directors that change every year will not make this mistake again.
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