Congress Passes “Protecting Nonprofits from Catastrophic Cash Flow Strain Act of 2020”

Posted on July 9, 2020 In COVID19

For the past three months, Orthodox Union Advocacy has communicated the needs of our member schools and shuls to the United States Congress, White House, and other officials.  We are pleased to share that one of the bills we have advocated—S. 4209, the bipartisan “Protecting Nonprofits from Catastrophic Cash Flow Strain Act of 2020”—passed the United States Senate last week and unanimously passed the House of Representatives today. [Update: President Trump signed this act into law Aug. 3, 2020]


Currently, 37 states require charitable nonprofit organizations to reimburse unemployment compensation paid to their employees laid off or furloughed due to COVID-19.  Unlike most for-profit employers, nonprofit organizations that self-insure under the federal and state unemployment system must pay the costs caused by this pandemic immediately.

The previously passed CARES Act required that nonprofits pay 50 percent of the cost of unemployment insurance to the state, while the federal government covers the other 50 percent. Guidance issued by the Department of Labor required states to collect 100 percent of unemployment insurance costs up front and reimburse them later, putting further strain on organizations already hit hard by COVID-19.   The “Protecting Nonprofit from Catastrophic Cash Flow Strain Act of 2020” will clarify that nonprofits are only required to provide 50 percent in payments to the state up front.


While this legislation is not a complete solution to the strain the cost of unemployment insurance puts on nonprofits, it is a step in the right direction.  We hope this will provide your school or shul with a measure of financial relief.  Orthodox Union Advocacy will continue to fight for measures that help our shuls and schools in this unprecedented time.