News Council submits testimony on UI relief for Mass. nonprofits

The Providers’ Council has submitted testimony in support of House Bill 4743, An Act assisting non-profits to provide for COVID-19 unemployment benefits.

As the the state’s largest association of community-based health and human services organizations, many of which self-insure for unemployment, the Council supports this legislation that would create a Non-Profit Unemployment Benefit Fund.

The community-based human services sector has been on the front lines of this pandemic, helping to provide critical care to one-in-ten Massachusetts residents on behalf of the Commonwealth. While many other sectors have been able to transition to working from home, a large percentage of human services workers remain on the job, as they are helping clients and consumers in congregate care settings.

Many Council members self-insure for unemployment insurance (UI). Under this model, instead of paying quarterly state unemployment taxes at a predetermined rate, the agencies reimburse the Commonwealth’s UI trust and make claim payments for layoffs as they occur. This works well under normal circumstances, particularly in the human services sector, which has  seen unprecedented job growth over the last 15 years – outpacing many other sectors.

But no organization could have foreseen the immense financial burden associated with COVID-19 layoff rates. Now these skyrocketing costs put the future of programs serving Massachusetts’ most vulnerable residents in jeopardy.

“These human service agencies – which serve clients on behalf of the Commonwealth on purchase-of-service contracts – simply do not have revenue to be able to pay for the UI claims that occurred only due to the response required by a global pandemic. The funds to pay reasonable wages or support programming will need to be reallocated to pay claims,” Michael Weekes, the Council’s president and CEO, wrote to legislators.  Read the full testimony here.

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