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DelBene, Casten Introduce Bill to Provide Greater Relief to Struggling Nonprofits During COVID-19

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Kirkland, WA, February 17, 2021 | comments

Representatives Suzan DelBene (WA-01) and Sean Casten (IL-06) introduced the Emergency Unemployment Relief for Nonprofits Act this week, legislation that would provide greater relief to struggling nonprofits during the COVID-19 pandemic. This would protect unemployment benefits for laid-off workers and make sure nonprofits can continue providing critical services in their communities.

Nonprofits typically do not pay the unemployment taxes that businesses do for their workers. Instead, they reimburse the state for the cost of benefits when they lay off workers. This system normally works well because layoffs are comparatively rare at nonprofits. However, during the pandemic, some nonprofits needed to furlough large numbers of employees and the cost of their unemployment benefits became crippling. This has been more acute for organizations responding to COVID-19 and addressing the increased needs in their communities.  

In the CARES Act, Congress provided a first-ever 50 percent federal subsidy for nonprofit unemployment insurance benefits so organizations would only pay half of the costs, yet many nonprofits are still struggling to cover their portion. The bill would increase that subsidy to 75 percent after March 31, 2021. It also makes the subsidy fully reimbursable to fully maximize the benefit.

This legislation was included in the American Rescue Act, President Biden’s COVID-19 relief bill. The unemployment provisions were approved by the Ways & Means Committee on February 11. The House is expected to pass the package next week.

“At a time when nonprofits are responding to greater demand than ever from their local communities, but with fewer resources, the federal government should step in with assistance to make sure these critical services continue,” said DelBene. “In my region, the Washington state YMCAs have spent $6 million on unemployment costs while also stepping up to provide full-time child care for first responders and other essential workers during school closures so parents can return to work again. This relief is sorely needed by nonprofits across the country right now.”

“In my community and across the country, nonprofit organizations from food banks to homeless shelters and mental health providers are struggling to stay afloat—working tirelessly to keep up with increased need with far fewer resources. In all my conversations, I hear folks describe how their organizations are stretched thin,” said Casten. “This bill will help those nonprofits struggling to provide benefits to the workers they’ve been forced to lay off and help ensure their employees can continue to serve as a lifeline to our communities.”

“Nonprofit jobs are down an estimated 7.4% nationally. Increasing federal reimbursement to self-insured nonprofits is the biggest step we can take right now to preserve the nonprofits we love and increase employment in our sector,” said Laura Pierce, Executive Director of Washington Nonprofits.

The text of the Emergency Unemployment Relief for Nonprofits Act is available here.
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