Casten, DelBene Introduce Bill to Boost Non-Profit Unemployment Insurance
Downers Grove, IL – Last week, U.S. Representative Sean Casten (IL-06) and U.S. Representative Suzan DelBene (WA-01) introduced the Emergency Unemployment Relief for Nonprofits Act, which would extend a CARES Act provision that provided a 50 percent subsidy for non-profits that offered unemployment benefits, and increase that subsidy to 75 percent beginning after March 31. This bill ensures that the subsidy is reimbursable. The subsidy would remain available through October 3, 2021 at the 75 percent rate.
This bill addresses a large issue non-profits have faced in the COVID pandemic when they need to lay off employees, because they do not normally pay unemployment taxes, they simply reimburse the state unemployment office for the actual cost of benefits paid when they lay people off. This system normally works well because layoffs are relatively rare. But during the pandemic, some non-profits employers were forced to furlough large numbers of employees, and the cost of their unemployment benefits was crippling, especially for organizations also working to combat the COVID pandemic and address increase needs in the communities.
Last year, Congress provided a first-ever 50 percent federal subsidy, so that non-profits would only pay half of the benefit to the state unemployment office, in the CARES Act, but many nonprofits are still struggling to pay even half. We are lucky in Illinois that the state has covered much of the remaining half, but many non-profits in other states have not been so fortunate. This bill increases the federal contribution to 75 percent which will help non-profits better provide for laid off workers, as well as free up scarce state resources in Illinois.
Casten said, "In my community and across the country, nonprofit organizations from foodbanks 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. This bill will help those non-profits 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."
"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."