Most section 501(c)(3) nonprofit employers electing reimbursable coverage must submit a collateral deposit with their application to the Office of UC Tax Services (UCTS). Political subdivisions are not required to submit a collateral deposit.
Amount of Collateral Deposit
The collateral deposit must be one percent (1%) of the employer's most recent four calendar quarters of taxable wages prior to the date of election of the reimbursable status. If the employer did not pay wages throughout the specific four calendar quarters, the employer has a choice of three options:
allow UCTS to establish the amount of the collateral deposit;
multiply the number of employees to be hired in a 12-month period by the $8,000 taxable wage limit and multiply by 1%;
estimate the taxable earning of each employee and multiply the total by 1%. (This option is possible only if there is reasonable assurance of the earnings of each employee.)
Acceptable Collateral Deposits
Acceptable forms of collateral deposits for reimbursable employers (if required) are as follows:
- US Postal Money Order
- Surety Bond (four year bond to expire December 31st of expiration year)
- Cashiers Check (must be drawn on a PA bank or PA branch bank)
- Certified Check (must be drawn on a PA bank or PA branch bank)
- Official Check (must be drawn on a PA bank or PA branch bank).
The Department prefers receipt of collateral deposits in the form of a US Postal Money Order or Surety Bond.
Requirements of Collateral Deposits
Bank guaranteed checks and US Postal Money Orders must be made payable to the Pennsylvania Unemployment Compensation Fund. Bank guaranteed checks must be issued by a Pennsylvania bank or Pennsylvania branch bank.
A Surety Bond cannot replace other forms of collateral unless the collateral to be replaced is held along with the bond for a period of 2 1/2 years beyond the effective date of the bond.