CUPA-HR Asks Senate to Provide Unemployment Insurance Relief for Self-Insured Colleges and Universities
On June 1, CUPA-HR joined the American Council on Education (ACE) and other higher education associations in sending a letter to Senate leaders requesting additional unemployment insurance (UI) relief for self-insured colleges and universities. The letter raises concerns with Department of Labor (DOL) guidance requiring self-insured nonprofits to pay money to state UI agencies before seeking federal relief provided under the CARES Act. The letter asks Congress to change the law to allow states to use federal funds to reduce the amount of UI reimbursements owed on the front end.
Under the CARES Act, emergency unemployment funding is provided to states to reduce the financial liability of self-insured nonprofits, including public and private colleges and universities, for their COVID-19 UI claims. Self-insured nonprofits are typically required to reimburse their state UI trust funds for the full amount of benefits their laid off employees claim, but the CARES Act enacted provisions directing the federal government to pay 50 percent of the reimbursable unemployment benefits and allowing states the flexibility in collecting the remaining 50 percent from these employers. The legislation also authorized the DOL to issue guidance to implement the UI reimbursement relief, stating that the guidance should be used to “provide maximum flexibility to reimbursing employers.” Generally, the higher education community supported these provisions, as it believed the relief would help colleges and universities with the many economic challenges they are facing.
On April 27, the DOL issued its guidance, which raised concerns among the higher education community. In the guidance, the DOL requires states to bill self-insured nonprofits for the full amount of their COVID-19-related UI claims and then request reimbursement from their state unemployment trust funds for 50 percent of the amount paid, essentially granting little to no additional flexibility in reimbursements by institutions. As the ACE letter states, this guidance imposes additional financial burdens on colleges and universities, which are already struggling with the economic challenges brought on by the pandemic.
In response to the DOL’s guidance, the higher education community asks Congress to pass legislation that ensures that states are able to use the federal funds provided to state UI programs under the CARES Act to reduce the UI reimbursement amount that is owed by self-insured public and private nonprofit colleges and universities. They argue that freeing up federal funds for state UI trust funds can help employers better respond to other issues related to the COVID-19 response.
For more information on unemployment insurance and other COVID-19 issues, visit CUPA-HR’s COVID-19 resources page.