July 13, 2020 3:20 a.m.

U.S. Senator Ron Wyden said that House passage of legislation he introduced to assist non-profits will help those groups to remain financially viable during the COVID-19 pandemic.

The Protecting Nonprofits from Catastrophic Cash Flow Strain Act was approved in the House on Thursday after passing in the Senate on July 2nd.

Wyden said “nonprofit organizations in Oregon and nationwide are essential pieces of each community’s response to weather the devastating economic and public health challenges leveled by the coronavirus”. Wyden said as nonprofits battle to maintain an effective safety net, he is glad the bill will help their cashflow during the crisis.

Wyden’s release said many nonprofits operate as “reimbursing employers” which means they pay their share of unemployment taxes by reimbursing states for 100 percent of the unemployment benefits collected by their former employees. The release said recognizing that reimbursing employers would be unable to cover all their unemployment costs, the CARES Act allows nonprofits to reimburse only 50 percent to the states while the federal government covered the other 50.

Guidance issued by the Department of Labor in April, however, requires states to collect 100 percent of unemployment costs from nonprofits up front and reimburse them later, putting a further strain on organizations hard hit by COVID-19, according to the release.

Wyden said his legislation clarifies that nonprofits are only required to provide 50 percent in payments up front. He said the net cost to the employer and the federal government would remain the same, but would free up much needed money to help nonprofits stay afloat.