Last night, the U.S. Department of Labor (DOL) issued guidance (Unemployment Insurance Program Letter No. 18-20) on how states can implement a new federal law (Section 2103 of the CARES Act) intended to help minimize nonprofits’ liability for unemployment insurance (UI) claims related to COVID-19. The DOL guidance cuts against the intent of this CARES Act provision by:
Delaying payments to nonprofits that would offset a portion of the costs related to their workers’ COVID-19 related UI claims; and
Penalizing some states that try to provide additional assistance to these nonprofits.
Practically, the impact of this DOL guidance will be devastating for many nonprofits. They will need to delay the rehiring of laid-off or furloughed workers, make further cuts to essential programs and services, and, in some cases, close their doors altogether.