In This Week's Edition of Snapshot...
A Stalled COVID-19 Package
This week, Senate Republicans did not release their legislative package to address the ongoing impact of COVID-19. Disagreements among Senate Republicans and with the White House over several issues appears to have delayed the release another week. While nothing is certain until text of the legislation is released, it appears from comments by Administration and Congressional leaders that a few things are in the current Republican package. These include another round of stimulus checks, additional or expanded tax credits for businesses that maintain employees or hire additional workers, additional funding for schools, money for expanded testing and tax incentives for businesses to purchase equipment to help protect workers against COVID. The President’s push for a payroll tax holiday did not make it in the current package. It is unclear if the Republican bill will include improvements to the $300 above-the-line charitable deduction provision that was in the CARES Act.
One of the issues that appears to be at the center of the negotiations is possibly extending a version of the enhanced unemployment benefits that was passed in March. After July 31, millions of American workers still in need of unemployment benefits will no longer receive an additional $600. States had warned Congress that without immediate action they would be unable to reprogram their systems impacting more than 20 million Americans, as noted by the New York Times.
Another issue where there appears to be some disagreement is around liability protections for workplaces, schools, businesses, and other places. Senate Leader McConnell has made no secret that strong liability protections are a priority of his for this round of legislation. Last week, there was a draft summary document of a proposal that would make it difficult for workers to make a case if they were to get the virus on the job.
With Monday, July 27th as the new date for Republicans to release their counter to the House’s HEROES Act passed in May, there will be little time for Congressional leaders to finalize a deal before August 7 for their annual August recess. Given all this, last week Speaker Pelosi had said that she was open to delaying the House’s August recess plans and it appears Congress may need the extra time.
Honoring Congressman John Lewis
On Friday, July 17, 2020, Congressman John Lewis died from pancreatic cancer. Congressman Lewis’s powerful legacy as a leader in the fight for social justice was captured in his New York Times obituary, including his leadership during the Civil Rights Movement and as the Conscience of Congress. In Congress, the Council on Foundations was honored to work with Congressman Lewis as a member and later co-chair of the House Philanthropy Caucus. At an event for the Council in Atlanta, he called on those in the audience to “do something” to make a difference. The Congressman’s family has announced a series of services and celebrations to honor his life and legacy.
A New Policy Brief on Payout Requirements
The Council recently released a new policy brief in response to a recent proposal to double the payout requirement for private foundations and create a new mandate for donor-advised funds. Since COVID-19 began its devastating course, philanthropy has stepped up to provide new resources and increased flexibility to those organizations and communities most impacted. The brief discusses the Council’s concerns, including the impact of this proposal on philanthropy’s ability to respond to future crises.
ICYMI: Lankford and King Op-Ed
This week, Senators James Lankford (R-OK) and Angus King (I-ME) published a joint op-ed in The Hill calling for additional investments to support the nonprofit sector as they continue to help families and communities at this critical time.
Our writer for issues concerning the Executive Branch is out of the office this week.
Exclusive from our colleagues at the National Council of Nonprofits.
Self-Insuring Nonprofits Face Disparate Treatment Under State Unemployment Laws
The pandemic is turning what has normally been deemed the smart business decision – self-insuring rather than contributing unemployment tax payments to subsidize other employers – into a fiscal nightmare. Ordinarily, nonprofits that take the self-insurance option pay to their state 100 percent of the costs of unemployment benefits paid to laid-off or furloughed employees. Historically low turnover in the nonprofit sector makes self-insuring good business sense. These are not normal times, however, and thousands of nonprofits across the country have been forced to reduce staff because of government-ordered shutdowns and health concerns. The resulting massive layoffs, in turn, are generating substantial invoices from state unemployment offices that are 10 to 25 times greater than in previous years. Nonprofit advocates are promoting federal coverage of the full amount of these unemployment costs, but state laws are complicating the ability of nonprofits to cope with the immediate challenges.
Nonprofits and other employers that self-insure under their state’s unemployment compensation system are discovering numerous quirks, anomalies, and disparate treatment under state law as they confront enormous bills due to COVID-related layoffs. Thirteen states send invoices on a monthly basis, 37 states and the District of Columbia bill quarterly, and North Carolina makes annual assessments. Some states expressly treat self-insured nonprofits differently than those that pay unemployment taxes (contributing employers). For example, Colorado requires self-insured nonprofits to pay their bills upfront, but don’t charge the accounts of other employers when layoffs are due to COVID-19. Similarly, an executive order from the Ohio Governor provides that contributing employers won’t suffer adverse consequences because of the increase in unemployment claims, but expressly excludes self-insured employers from this exemption.
However, not all the treatment of nonprofits in the states is unfair. Montana, New Mexico, and North Carolina have relieved all employers – for-profit and nonprofit; contributing and reimbursing – of any liability for layoffs related to COVID-19. Massachusetts and Texas, recognizing that the federal government is best able to solve this problem, have delayed the due dates for payments by self-insured employers with the expectation that Congress will cover 100 percent of the costs, a significant policy objective of the nonprofit community.