NC Senate jobless benefits reform bill adds employer tax-holiday element as sweetener | Govt-and-politics

The Democratic sponsors of a N.C. Senate unemployment insurance benefits bill have added an employer-friendly “tax holiday” element in hopes of attracting support from the business community — and possibly Republicans.

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

The bill was sent directly Friday to the Senate Rules and Operations committee, where bills with limited, if any, Republican support are shelved upon introduction.

The senators also introduced Senate Bill 320 during the 2021 session. That bill was not heard in committee even though Democratic Gov. Roy Cooper declared his support for the legislation.

The senators revamped the title of SB320 from “2021 Unemployment Insurance Reform” to “Tax Relief for NC Employers & UI Reform” in SB848.

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If signed into law, the tax holiday portion of SB848 would allow employers to suspend their contributions and payments to the state’s Unemployment Insurance Trust Fund from July 1 through Dec. 31, 2023.

Employers pay a tax into the state’s UI system in a range of 0.06% and 5.76% based on their number of workers. Employers can pay a higher rate based on their history of job cuts and layoffs.

The state had $3.85 billion in the state UI Trust Fund when the brunt of the COVID-19 pandemic began to be experienced in mid-March 2020. There was about $2.59 billion in the fund as of February.

Republican legislators have supported lowering employers’ UI tax contributions because of the current UI Trust Fund surplus.

The tax holiday likely represents the Democratic senators’ bid at employing the give-and-take strategy that helped reach a compromise on the state 2021-22 budget and is being used with a multilayered bipartisan Senate health-care reform bill that includes Medicaid expansion.


The Republican legislative super-majority approved in 2013 a sliding scale for UI benefit weeks based on the unemployment rate.

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

Before the UI law was passed, North Carolinians received a maximum of 26 weeks.

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

The sliding scale based on jobless rates is: maximum of 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 higher.

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

Now, as in 2013, Republican legislative leaders favor limited UI benefits, in part because they didn’t want recipients — who lost their job through no fault of their own — to rely on the benefits over working.

During the first 18 months of the pandemic, many GOP congressional representatives and state legislators decried the fact that some unemployed and furloughed North Carolinians made more in combined state and federal UI weekly benefits at $300 than they did in their weekly paychecks.

SB848’s main focus

Since Congress allowed two key federal COVID-19 pandemic relief programs to expire in September, North Carolinians who have been laid off or furloughed over the past nine months have received a maximum state benefit of between just 12 and 13 weeks.

It’s the lowest number of maximum benefit weeks in the country.

According to the left-leaning N.C. Justice Center, North Carolinians 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 goal is to try to do what we can to help the unemployed,” Lowe said when SB320 was submitted in March 2021.

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

The bill would allow claimants to qualify for UI benefits if they moved to North Carolina as part of their spouse relocating for a job. Claimants also could qualify for UI benefits if they have certain health issues, left their job in response to domestic violence, or can’t work “due to an undue hardship.”

SB848 also would forgive overpayment to UI beneficiaries if the overpayments were due to N.C. Division of Employment Security error, and not applicant fraud.

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

“We need to fix our worst-in-the-nation unemployment insurance program and throw jobless workers a lifeline.”

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

That bill would create a 13-member Legislative Study committee on UI whose sole purpose is to evaluate and make recommendations on which group of states North Carolina should be compared with in terms of benefits.

HB859 also was sent directly to Rules and Operations, where it has been shelved, in large part because several current GOP legislative leaders participated in establishing the 2013 UI benefit cuts.

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