North Carolina Senate Unemployment Benefits Reform Bill Adds Tax Holiday Element for Employers as Sweetener | Government and politics

Democratic sponsors of a North Carolina Senate unemployment insurance benefits bill have added an employer-friendly “tax holiday” element in hopes of attracting support from the business community – and maybe Republicans.

Senate Bill 848 has Senator Paul Lowe of Forsyth County among its top three sponsors, along with Wiley Nickel of Wake County and Mike Woodard of County Durham.

The bill was sent directly Friday to the Senate Rules and Operations Committee, where bills with little or no Republican support are shelved upon introduction.

Senators also introduced Senate Bill 320 in the 2021 session. This bill did not make it to committee even though Democratic Gov. Roy Cooper has declared his support for the legislation.

The senators reorganized the title of SB320 from “Unemployment Insurance Reform 2021” to “Tax Relief for North Carolina Employers and Unemployment Insurance Reform” in SB848.

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If enacted, the tax exemption portion of SB848 would allow employers to suspend their contributions and payments to the state Unemployment Insurance Trust Fund from July 1 through December 31, 2023.

Employers pay a tax in the state unemployment insurance system in a range of 0.06% and 5.76% depending on their number of workers. Employers may pay a higher rate depending on their history of job cuts and layoffs.

The state had $3.85 billion in the state unemployment insurance trust fund when the brunt of the COVID-19 pandemic began to take its toll in mid-March 2020. There was about $2.59 billion in the fund in February.

Republican lawmakers have supported reducing employers’ unemployment insurance tax premiums due to the current surplus in the unemployment insurance trust fund.

The tax holiday likely represents Democratic senators’ attempt to use the give-and-take strategy that brokered a compromise on the 2021-22 state budget and is being used with a bipartisan tax reform bill. Senate Health Care which includes the expansion of Medicaid.


The Republican legislative supermajority in 2013 approved a sliding scale for weeks of unemployment insurance benefits based on the unemployment rate.

It ranges from 12 weeks – which the state had from July 2013 to January 2021 – up to a maximum of 20 weeks.

Before the Unemployment Insurance Act was passed, North Carolina residents received a maximum of 26 weeks.

The law also reduced the maximum weekly benefit from $530 to $350.

The sliding scale based on unemployment rates is: maximum 13 weeks at 5.6% to 6%; 14 weeks at 6.1% to 6.5%; 15 weeks at 6.6% to 7%; 16 weeks at 7.1% to 7.5%; 17 weeks at 7.6% to 8%; 18 weeks at 8.1% to 8.5%; 19 weeks at 8.6% to 9%; and 20 weeks at 9.1% and above.

The scale is only adjusted twice a year, in January and July. The number of weeks depends on the average unemployment rate from July to September for the January adjustment and from January to March for the July adjustment.

Now, as in 2013, Republican legislative leaders favor limited unemployment insurance benefits, in part because they didn’t want recipients — who lost their jobs through no fault of their own — to rely on benefits rather than work.

During the first 18 months of the pandemic, many GOP congressional representatives and state lawmakers spoke out against the fact that some unemployed and furloughed North Carolina workers were earning more in combined weekly state and federal unemployment insurance benefits than $300 than they did in their weekly paychecks.

The main purpose of SB848

Since Congress authorized the expiration in September of two key federal COVID-19 pandemic relief programs, North Carolinians who have been laid off or furloughed in the past nine months have received the maximum benefit. of the State ranging between only 12 and 13 weeks.

This is the lowest number of weeks of maximum benefits in the country.

According to the left-leaning NC Justice Center, North Carolinas have received an average of about 10 weeks of state benefits during the COVID-19 pandemic.

By comparison, 44 states provide at least 26 weeks of regular benefits.

SB848 contains most of the same benefit reform elements as SB320.

“The main focus is trying to do what we can to help the unemployed,” Lowe said when submitting SB320 in March 2021.

SB848 would increase the maximum weekly benefit to $500, as well as the maximum weeks to 26.

The bill would allow claimants to qualify for unemployment insurance benefits if they moved to North Carolina as part of their spouse’s move for employment. Claimants could also be eligible for unemployment insurance benefits if they have certain health conditions, quit their job in response to domestic violence, or cannot work “due to undue hardship.”

SB848 would also forgive the overpayment to Unemployment Insurance recipients if the overpayments were due to error by the North Carolina Division of Employment Security, not claimant fraud.

Nickel said introducing SB320 that “it’s shameful that in the midst of a pandemic, Republicans have failed to fix our broken unemployment system.”

“We need to fix our worst unemployment insurance program in the country and throw a lifeline to the unemployed.”

During the 2021 session, state House Democrats, including Representative Pricey Harrison of Guilford County, introduced Bill 859.

This bill would create a 13-member Legislative Study Committee on Unemployment Insurance whose sole purpose is to assess and make recommendations on the group of states to which North Carolina should be compared in terms of unemployment insurance. ‘advantages.

HB859 was also sent directly to Rules and Operations, where it was shelved, largely because several current GOP legislative leaders were involved in setting the 2013 unemployment insurance benefit cuts.