The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) contained several provisions applicable to nonprofit employers who reimburse the State of Rhode Island for unemployment compensation paid to their employees. The provisions are discussed below.

The federal government will issue guidance to allow states to interpret their state unemployment laws to provide “maximum flexibility” to reimbursing employers as it relates to timely payments and assessments of penalties and interest for payments.

Take Away: This means that nonprofit reimbursing employers can delay payments to the State of Rhode Island for unemployment if needed.

The federal government will also transfer into the state’s unemployment trust fund an amount to allow partial reimbursement up to fifty percent (50%) to certain employers, including nonprofit organizations who are “reimbursable” employers under the state’s unemployment program. Reimbursing nonprofits will be entitled to have the state’s Unemployment Fund repay them for half (50%) of their unemployment costs for employees terminated or laid off from March 13, 2020 to December 31, 2020.

Take Away: For nonprofit reimbursing employers, the take away is the following: From March 13, 2020 until December 31, 2020, the state will pay fifty percent (50%) of the employer’s unemployment costs by reimbursing the employer for those costs. Additionally, if the employer runs into any payment issues, the state is required to give the employer “maximum flexibility” in paying its share of unemployment as a reimbursing employer.

Employers must also be wary that its employees will soon know that they are going to be entitled to their weekly unemployment payment plus the $600.00 Federal Pandemic Unemployment Compensation ("FPUC") payment until December 31, 2020 and that the state has waived the waiting period to collect unemployment.

Take Away: For a $15/hour full-time employee, this means that they would collect about $1000.00/week (as compared to $400.00 without the FPUC payment); would immediately receive that amount without the employer submitting anything to the Rhode Island Department of Labor and Training and would be entitled to receive that amount until December 31, 2020.

Employers should also monitor their monthly billing statement to ensure that they are not charged for any ineligible or distantly separated employees. The CARES Act provides for Pandemic Unemployment Compensation (“PUC”) – unemployment available for gig workers, small business owners and other workers “ineligible” for traditional unemployment compensation. The federal government is responsible to pay PUC and it should not be charged to the employer’s account.

Pannone Lopes Devereaux & O’Gara LLC employment attorneys will continue to update employers about COVID-19 related issues that impact their organizations and workforce. If you have questions, please contact PLDO Partner Matthew C. Reeber at 401-824-5105 or mreeber@pldolaw.com or PLDO Principal William E. O’Gara at 401-824-5117 or wogara@pldolaw.com. For more information and resource materials about the COVID-19 pandemic, visit PLDO COVID-19 Resources and sign up to receive our e-newsletters, alerts and advisories here.


[back to top]