Nonprofit reimbursement bill reaches White House

A bipartisan nonprofit unemployment reimbursement bill introduced by Sen. Tim Scott was passed by the U.S. House of Representatives Thursday and is bound for White House approval.

The U.S. Senate’s Protecting Nonprofits from Catastrophic Cash Flow Strain Act, introduced by Scott and Sens. Sherrod Brown, D-Ohio; Chuck Grassley, R-Iowa;  and Ron Wyden, D-Ore., was passed unanimously by the Senate last week.

The bill allows nonprofits to reimburse states only 50% of the unemployment benefits collected up front, according to a release. Usually employers, including many nonprofits, reimburse states for 100% of unemployment benefits collected by former employees. However, because of the financial challenges brought on by the COVID-19 pandemic, the Coronavirus Aid Recovery and Economic Stability Act allowed nonprofits to reimburse 50% to the state.

Still, under Department of Labor guidance, nonprofits are expected to reimburse state 100% of the unemployment benefits upfront until federal funding covers 50% of the costs — a time gap the bill hopes to remedy.

“Nonprofit organizations play a vital role in our communities, especially during this time of uncertainty for so many American families,” Scott, said in the release. “This bipartisan legislation protects these vulnerable organizations from being placed in unnecessary hardship in the midst of the pandemic. I’m grateful for the support of my colleagues on this issue and looking forward to this being signed into law.”