Some ministries are experiencing the financial impact of the COVID-19 outbreak. Many ministries are temporarily canceling in-person services, activities, and fundraising events. Weekly giving is down. This substantial decrease in funds is causing many ministries, schools, and nonprofit organizations to struggle paying basic operational expenses such as payroll costs, group health insurance benefits, mortgage/rent payments, utilities, and other expenses.
The federal government, along with state and local governments, are issuing stay-at-home orders. Faced with these directives and mandates, your ministry will want to make sure it understands the types of businesses that are affected and those that may be able to stay open. Some states and counties have issued stay-at-home orders for most of the workforce, unless you are an essential business, which for many states includes religious organizations. If your ministry is considered an essential business, this may allow your organization to continue at least some of its operations. At a minimum, some emergency orders may contain exceptions for events such as funerals and weddings. Your ministry will want to read carefully any applicable state or county order to assess the scope of the order and the applicability to your ministry.
If you are required to cease operations and your employees cannot work remotely, your ministry will need to make some difficult business decisions, including whether to:
1) continue paying regular wages to employees to provide continuity and financial support during this difficult time; or
2) furlough employees who cannot telework by granting temporary leave of absence due to special needs of the ministry. This may allow workers to collect unemployment if it is available.
If you choose to furlough employees, you will want to clearly articulate your plans to continue operations when business returns to normal and when the employees may be able to return to work.
The Families First Coronavirus Response Act is a new law that addresses unemployment insurance and several federal entitlement and benefit programs (i.e., nutritional waivers and SNAP programs). It also creates a new benefit for emergency paid sick leave to address COVID-19. To learn more about paid sick leave provided by the Act, read our article posted here.
In addition, the Act provides emergency funding to state unemployment trust funds. This helps ease eligibility requirements for claimants as well as increase access to unemployment compensation for those directly affected by COVID-19 due to an illness in the workplace or official direction to isolate or quarantine workers.
Check with a local attorney about your state’s legislation regarding unemployment matters caused by the COVID-19 outbreak. Some states are waiving prerequisites to obtaining unemployment such as job search requirements and a waiting period. The Act seeks to increase access to unemployment benefits for laid off or furloughed workers unable to work due to COVID-19-related circumstances.
In some states, the federal funds are placed into the state’s unemployment trust fund. For contributory employers, benefits paid on unemployment claims from Act funds may not be charged to the employer’s account who otherwise would have been charged. Instead, the funds may be charged to the state’s trust account, except for reimbursing employers.
If your ministry is exempt from paying into state unemployment insurance and your ministry’s employees do not qualify for state unemployment, your workers may be eligible for the federal pandemic unemployment assistance provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). For more information on CARES Act unemployment assistance, read our article. Contact your state unemployment office or a local employment attorney to determine what unemployment benefits apply to your ministry’s employees.
Federal and state governments are working hard to pass virus-related legislation to help provide relief to individuals and businesses, including nonprofit organizations. Aid may be available for your ministry, school, or nonprofit to assist with basic operational expenses (such as payroll and rent) over the next few months until business can return to normal. This aid may help your organization avoid laying off employees. The CARES Act provides financial aid to qualifying religious organizations, nonprofits, individuals, and other organizations in response to COVID-19. Check out the Brotherhood Mutual article about the CARES Act for more details on federal aid that may be available for your ministry.
MinistryWorks by Brotherhood Mutual has payroll specialists standing by who help ministries with payroll related issues including withholding and paying for unemployment. For payroll related questions, you are welcome to reach out to our payroll specialists at 1-866-215-5540.
The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.