Wyden Introduces Legislation to Help Non-Profits
Summary
A press release dated June 19, 2020 from the office of U.S. Sen. Ron Wyden announcing a bipartisan bill to help nonprofits, state and local governments and federally recognized Tribes remain financially viable during the COVID-19 pandemic. It explains that many nonprofits are reimbursing employers, which pay for 100 percent of the unemployment benefits their former employees collect, and that the CARES Act lets them reimburse only 50 percent while the federal government covers the other 50. It states that the bill would ensure nonprofits receive federal help with unemployment payments up front rather than being reimbursed later, and quotes Wyden calling it a commonsense fix to help nonprofits such as food banks maintain cash flow.
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June 19, 2020 Wyden Introduces Legislation to Help Non-profits Bipartisan Bill Would Ensure that Nonprofits Receive Federal Help for Unemployment Payments Up Front, Rather than Being Reimbursed Later Washington, DC – U.S. Sen. Ron Wyden today introduced legislation that would help nonprofits, state and local governments and federally recognized Tribes remain financially viable during the COVID-19 pandemic. “Nonprofit groups like food banks have been critical in helping their communities in Oregon and nationwide through the pandemic and economic crisis,” Wyden said. “Many are struggling to maintain services as they have been forced to furlough their own employees. “Our proposal is a commonsense fix that will help nonprofits maintain the cashflow needed to survive this crisis and continue serving others in need,” he said . Many nonprofits operate as ‘reimbursing employers,’ which means they pay their share of unemployment taxes by reimbursing states for 100 percent of the unemployment benefits collected by their former employees. Recognizing that reimbursing employers would be unable to cover all of their unemployment costs, the CARES Act allows nonprofits to reimburse only 50 percent to the states while the federal government covered the other 50. Guidance issued by the Department of Labor in April, however, requires states to collect 100 percent of unemployment costs from nonprofits up front and reimburse them later, putting a further strain on organizations hit hard by COVID-19. The Protecting Nonprofits from Catastrophic Cash Flow Strain Act would clarify that nonprofits are only required to provide 50 percent in payments up front. The net cost to the employer and the federal government would remain the same, but would free up much needed money to help nonprofits stay afloat. For many nonprofit employers, the requirement to pay 100 percent of the UI bill before securing relief exacerbates the financial impact of historically high claims triggered by the pandemic, increasing the risk of further layoffs, closures, or substantial reductions in services. This legislation would enable states to provide the CARES Act’s 50 percent emergency relief to reimbursing employers without requiring these nonprofits or other entities to pay their full bill first. Joining Wyden in introducing the bipartisan Protecting Nonprofits from Catastrophic Cash Flow Strain Act are U.S. Sens. Sherrod Brown (D-OH), Tim Scott (R-SC) and Chuck Grassley (R-IA). More information on the bill is here . Next Article Previous Article
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