Department of Labor deals cash flow blow to not-for-profits

With the issuance of the Unemployment Insurance Program Letter NO. 18-20, the Department of Labor has provided guidance in implementing Section 2103 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which authorizes emergency unemployment relief for not-for-profit organizations. Under Section 2103, the state may reimburse 50% of the cost of unemployment claims charged to self-insured or reimbursing employers. Under these guidelines, states must bill employers for 100% of the unemployment claims as soon as possible. However, not-for-profits must wait to receive their 50% reimbursement. This means that not-for-profits must pay 100% of the claims and then seek reimbursement. Currently, there is no timeline for when these reimbursements need to be issued by the states.

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