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Last year, NJBIA was happy to see the Legislature move so quickly to address a pending unemployment insurance (UI) crisis. The association pushed for a remedy to soften the employer impact due to the massive unemployment caused by the pandemic, and A-4853 (Greenwald/Mazzeo/Verrelli)/S-3011 (Madden/Sweeney) was exactly what was needed.

NJBIA still believes the new law will have the desired effect to protect UI payroll taxpayers from a billion-dollar tax increase all at once. But NJBIA Vice President of Government Affairs Christopher Emigholz said the law is being interpreted differently from what was intended for the many nonprofits that have opted to pay reimbursements for UI instead of through the payroll tax.

Emigholz said he has even heard stories of nonprofits getting bills from the New Jersey Department of Labor & Workforce Development totaling several hundreds of thousands of dollars, and that is after they have been closed and/or limited for over a year.

Which is why NJBIA supported S-3714 (Madden/Gopal) this week – which aims to protect nonprofits from these bills.

The legislation passed the Senate Labor Committee by a bipartisan vote of 5-0.

Emigholz has been working with a coalition of nonprofits on S-3714 and with Assembly Majority Leader Greenwald, who is sponsoring the just introduced Assembly version, A-5691. He testified that supporting nonprofits through this bill is doubly important to our economic recovery.

“Nonprofits are major employers providing jobs to about 10% of the state, while at the same time, they offer services such as child care that support the rest of the workforce,” he said. “Their recovery is desperately needed for a broad economic and job recovery.”

Many nonprofits use the reimbursement option available to them because they traditionally have more stable workforces. Their few thousand-dollar reimbursements every few years made more financial sense to them than the UI payroll tax that would have cost them more and funds a program of which they rarely take advantage. But this all changed because of COVID-19.

“It has become cliché, but the pandemic was unprecedented and that includes its impacts on nonprofits’ traditionally stable workforce and their usually small UI bills.” said Emigholz.

NJBIA is seeking clarifying amendments to use federal funds to cover these nonprofit reimbursements.

Also, not knowing exactly what Gov. Murphy and/or the FY22 state budget may ultimately include to offset these large nonprofits UI bills, Emigholz is also seeking language to allow these nonprofits several years to pay any remaining UI costs while keeping them in good standing with other state departments so they can continue working with the state on the great programs they offer.


Taxation & Economic Development News

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