Collins seeks nonprofit protections against upfront unemployment costs

U.S. Sen. Susan Collins (R-ME) joined Maine’s bipartisan congressional delegation in requesting that the U.S. Department of Labor (USDOL) change federal guidance that could strain nonprofit groups by forcing them to pay unemployment costs upfront.

“We are writing to share our concerns about the recently issued guidance to the states from the USDOL regarding the implementation of unemployment relief to ‘reimbursing employers’ through the Coronavirus Aid, Relief, and Economic Security (CARES) Act,” Sen. Collins and the contingent wrote in a May 26 letter sent to U.S. Department of Labor (DOL) Secretary Eugene Scalia.

Under the guidance, states are required to bill these entities for 100 percent of the costs of unemployment benefits paid to employees who have been laid off because of the COVID-19 crisis, according to their letter.

“Left unchanged, this guidance would financially cripple Maine’s nonprofit community and risk disrupting the services they provide to Mainers in this challenging time,” wrote Sen. Collins and the lawmakers, who included U.S. Sen. Angus King (I-ME), as well as U.S. Reps. Jared Golden (D-ME) and Chellie Pingree (D-ME).

Additionally, the USDOL guidance does not provide needed flexibility to the states and would prohibit the Maine Department of Labor (MDOL) from requiring reimbursing employers to cover 50 percent of the cost of claims up front and drawing down the remaining 50 percent from USDOL directly, according to their letter.

“Instead, reimbursing employers — including hundreds of Maine nonprofits — would have to come up with 100 percent of the cost up front and then seek a 50 percent reimbursement from an already overburdened MDOL,” Sen. Collins and her colleagues wrote. “Having to provide such a significant investment up front is untenable and could result in the elimination of vital services.”

The members also urged Secretary Scalia to update the guidance to allow state departments of labor to provide the 50 percent reimbursement up front, consistent with Congress’ directive that USDOL provide maximum flexibility pursuant to the CARES Act.

“Doing so would help ensure that Maine’s nonprofits can continue to serve communities at a time when they are needed most,” Sen. Collins and the lawmakers wrote.

Their efforts are supported by Goodwill Industries of Northern New England, the YMCA Alliance of Maine, New Hampshire, and Vermont, and the Maine Association of Nonprofits.