unhappy that doesn't qualify for unemployment benefits.
For decades, nonprofits had been allowed to opt out of state unemployment insurance payments and instead make payments of the actual costs of the benefits when layoffs occur. Nationally, federal and state law enables many employers—including states, American Indian nations (“federally recognized Indian tribes”), local governments, and nonprofits—to opt out of prepaying into state unemployment insurance pools.
Last month, Jon Pratt, CEO of the Minnesota Council of Nonprofits, told NPQ that he estimates that over 100,000 qualifying organizations, both governments and nonprofits, in the US have this status. As an illustration, he estimated that in Minnesota, roughly 4,200 of 9,100 nonprofit employers—close to half—self-insure in this manner.
nonprofitquarterly.org
Now they are in trouble.
The simplest, most straight-forward fix would be for Congress to hold self-insured nonprofits harmless for 100 percent of the costs that would be charged of their COVID-19 related unemployment insurance claims. Otherwise even more nonprofits that communities rely on will close. That’s why the Nonprofit Community Letter submitted to Congress calls for such legislation.
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Nonprofits must wake lawmakers and decision-makers up to the vital need for protections from the enormous burdens of unemployment benefits. Otherwise, many nonprofits may be forced to eliminate programs and services, lay off more employees, delay rehiring their staffs, or close their doors indefinitely.
The economic and health crises facing our nation are massive. A legislative fix and administrative rule adjustment regarding unemployment insurance accounting may seem small amid the historic challenges we face. Going forward, everyone must join in laying the groundwork for truly transformative change that creates a much stronger and more just society.
Nonetheless, as communities turn to local nonprofits in their hour of need, we must do all we can to ensure that nonprofits have the resources needed to be responsive. Unemployment tax policies that penalize nonprofits that are self-insured precisely because they historically kept their staff employed is counterproductive. Congress must correct CARES and DOL must concede
ELMAT
Before the pandemic, charitable nonprofits employed more than 12.3 million people—more than 10% of the workforce
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