Nonprofits will benefit in coming weeks thanks to determined actions by the South Carolina Department of Employment and Workforce and U.S. Sen. Tim Scott.
DEW rightly grew alarmed by a new U.S. Labor Department ruling postponing a provision of the CARES Act intended to relieve nonprofits such as churches, homeless shelters, museums and many hospitals of a financial burden that businesses don’t face. Specifically, the provision halved the amount of unemployment insurance taxes they must submit during the COVID-19 crisis. Under the ruling, nonprofit employers would be required to file the full amount owed in quarterly payments and could be reimbursed only retroactively, at an uncertain time.
The agency, which runs the state’s unemployment system, said in a recent news release that it rapidly realized that this was a hardship potentially amounting to hundreds of thousands of dollars. It’s a financial weight that many of the state’s nonprofits simply could not bear.
“Talks within the agency quickly identified this as a serious problem for reimbursable employers. An insurmountable problem,” said Dan Ellzey, executive director of DEW. “We were looking at thousands of out-of-work South Carolinians tied to nonprofits, churches, hospitals and more. By placing the onus on the organization to pay the bill outright, we were going to do a disservice to the state.”
Subsequent discussions with Labor Department officials led to a realization that only Congress could fix the problem.
“We knew we had to speak out on behalf of these businesses, and we needed help to do that,” said Mr. Ellzey, so the agency turned to Sen. Scott, R-S.C., who quickly grasped the problem and worked with South Carolina’s congressional delegation on a bipartisan solution that was signed into law Aug. 3.
That bill, the Protecting Non-Profits From Catastrophic Cash Flow Strain Act, allows the employment department and similar agencies to bill for only half of the unemployment insurance funds due.
Having anticipated the problem, DEW had held off sending out quarterly bills until the new law was passed.
As a result, Sen. Scott says, “Nonprofits will have more resources available to continue providing services in our communities without being placed in unnecessary hardship in the midst of the pandemic.”
Madeleine McGree, president of Together SC, a statewide organization supporting nonprofits, told DEW, “Critical community organizations, including everything from shelters for our homeless citizens to YMCAs, now have a much greater chance of surviving this pandemic.”
That’s crucial because nonprofits are suffering right along with other businesses.
This heads-up thinking by a South Carolina agency promises to benefit nonprofits across the nation. For that, DEW and Sen. Scott deserve a hearty thanks.
