Legislation to Update Non-Profit Unemployment Insurance Relief Introduced

Trenton – In response to the American Rescue Plan now covering 75% of a non-profit employer’s unemployment insurance payments due to the COVID-19 pandemic, legislation that would update coverage, initially written in response to the CARES Act, to cover the remaining 25% for nonprofit and government employers was introduced today by Senator Fred Madden and Senator Vin Gopal. Assembly Majority Leader Lou Greenwald will sponsor the companion bill in the Assembly.

“The COVID-19 pandemic has greatly affected non-profit organizations, drastically reducing staffing and shifting priorities,” said Senator Madden (D-Camden/Gloucester). “National surveys have reported that less than half of non-profits expect to meet or exceed their 2020 revenue goals. This bill is crucial to ensure that our non-profit businesses are not negatively impacted any further by the COVID-19 pandemic.”

The law under previous legislation, S-3011, currently exempts any non-profit employer that elects to make direct payments, in lieu of taxes, for unemployment insurance compensation paid to laid-off employees during the COVID-19 pandemic. Under that law, written in response to the CARES Act, the non-profits have reduced liability covering 50% of the costs incurred by the employer, with federal relief from the CARES Act covering the remaining 50%. However, the American Rescue Plan now covers 75% of the liability costs, so, as a result, the proposed bill would alter the law for the State to cover the remaining 25% instead.

“Due to the COVID-19 pandemic imposing lockdowns and social distancing, business for many non-profits has slowed, which has also caused difficulties for these businesses’ fundraising efforts,” said Senator Gopal (D-Monmouth). “This bill will give non-profits the assistance they need to make it through the remainder of the pandemic.”

“Throughout this crisis, nonprofits that provide services such as food donations, homeless prevention, and senior services have stepped up to ensure residents continue to receive these vital services,” said Assemblyman Greenwald (D-Burlington/Camden). “However, not unlike many businesses around the State, the pandemic has also taken a toll on these nonprofit organizations and their mission. This adjustment to the law is vital to helping non-profits continue their mission, retain employees and rebuild as we continue to move through this pandemic.”

Under the new provisions, this coverage would relieve these employers from their portion of their Unemployment Insurance payment, less any payroll taxes employees have already held in trust by the fund. Any employer who already made payments would be eligible for reimbursement.

The bill was introduced to the Senate today and is pending referral to committee.