Legislative Update: 2/3/23

The legislative session is in full swing and Common Good VT has been busy advocating for the sector. Read on for updates and ways to weigh in and get involved:

Nonprofit Advocacy Trainings:

Ready to dip your toe into advocacy? Or perhaps you’re in need of a refresher?

Join Common Good VT and Action Circles on February 7th for TWO nonprofit advocacy webinars. All levels of experience are welcome and recordings will be available if you can’t make it live. Learn more and register here!

Common Good Vermont Testifies on Unemployment Insurance

Emma Paradis & Jesse Bridges (on the Zoom screen) testifying on proposed changes to unemployment insurance impacting nonprofits.

On Thursday, Common Good Vermont and United Way of Northwest Vermont testified in front of the House Committee on Commerce and Economic Development on two bills related to unemployment insurance (UI) impacting nonprofits:

  • H. 55 – An act relating to miscellaneous unemployment insurance amendments
    This bill would:
    • Eliminate the Small Employer UI Exemption: Small nonprofits with three or fewer employers are currently exempt from having to provide unemployment insurance for their employees. This bill would require all nonprofit employers to provide unemployment insurance for their employees.
    • Establish a Bonding Requirement for Reimbursable Employers: Reimbursable employers (or “self-insured”) elect to be liable for unemployment insurance claims, rather than pay state unemployment taxes. This bill would require reimbursable employers to execute and file a surety bond or deposit in the amount of two percent of the organization’s wages paid in the previous four quarters, by September 30, 2023.
  • H. 92 – An act relating to expanding eligibility for unemployment insurance
    This bill would expand unemployment insurance coverage to individuals voluntarily separating from their employer in instances including injury, illness, domestic or sexual violence, or to care for a child.

In our testimony on H. 55 we advocated for an extended timeline for any changes and highlighted the need to provide additional training and information to nonprofits to help them make informed decisions. We agree that all nonprofit employees should be covered by unemployment insurance, so our our primary concern here is that organizations have time to plan for the transition. Gretchen Owens of EDD Adaptive Sports also submitted written testimony on this bill from the perspective of a small nonprofit that would be impacted by this change – thank you!

With regard to the bonding requirement, we don’t see the need for or value of creating one, especially given the existing pressures nonprofits are already experiencing. We instead stressed the need to provide nonprofits with the education and information they need to understand their options and liabilities. Committee Chair Marcotte seemed receptive to this idea. Following our testimony, in consideration of an educational approach, he said that “I think I feel better going down that road first than requiring people to get bonded or to come up with some other type of program. So there’s a good understanding by all the nonprofits of the benefits and not so good things about being reimbursable…We’re maybe working with Common Good and United Way developing maybe a webinar or something to get that word out.”

On both issues we brought up the need for nonprofit employment and economic data to better inform decision making.

H. 92 was not as much of a priority for us as it is not a sector-specific issue, but we did ask for clarification about the impact on reimbursable employers. Later in the afternoon, it was confirmed by the Department of Labor that reimbursable employers would be liable for claims that fall under this carve out (while taxable employers would not have their experience rating impacted). Not only is this an additional expense for reimbursable employers, but those that pay into the UI trust fund would have to do so at a higher rate to cover additional claims.

Find out more:

We want to hear from you: Are you a small nonprofit with <4 employees? OR Does your organization choose to reimburse for unemployment insurance rather than pay taxes? Email [email protected] if you want to learn more or weigh in on these issues.

Government Grants & Contracting

Addressing government grant and contracting issues is a priority for Common Good VT this year. We have convened a group of nonprofit stakeholders to collaboratively work towards solutions. At our meeting this week, we identified two primary areas of focus:

  • Funding the Full Cost of Services
  • Increasing Indirect Cost Rates

As this is a sector-wide issue, we are seeking a united, sector-wide approach – we are stronger together! We’ll be sharing more soon but if your organization is interested in getting involved, or if you are already working on these issues, please reach out to [email protected].

We are also monitoring a couple of bills related to government grants and contracting:

Other Bills We’re Monitoring

Have thoughts or questions on these bills? Are we missing something? Email [email protected].