North Carolina lawmakers push bill to keep reduced unemployment tax rate
(The Center Square) – Legislation that would offer tax relief to business owners has advanced in the North Carolina House.
Companion bills House Bill 107 and Senate Bill 114 would prevent the base unemployment insurance tax rate for experienced employers from increasing in 2021, keeping the base contribution at 1.9%.
The legislation was recommended by the Joint Legislative Oversight Committee on Unemployment Insurance after consulting with the North Carolina Department’s Division of Employment Security (DES).
Both measures, which included several technical changes to COVID-19 related unemployed benefits, were referred to the rules committee in each chamber. HB 107 was scheduled for a full House vote Thursday but was referred back to the Committee On Rules, Calendar and Operations of the House.
Each employer’s unemployment insurance premium includes their base rate and experience rate. An experience rate is based on the employer’s risk level, mostly evaluated on how many workers have received unemployment benefits.
Under North Carolina law, state unemployment tax has three possible base rates, which adjust each year based on the state’s unemployment trust’s solvency. The lowest base rate was applied in 2019, and the middle base rate was supposed to be activated in 2021 under current law. HB 107 would put the adjustment on hold this year.
The legislation modifies law to ensure wages that may reduce unemployment benefits are earned within the same week as the benefit payment. HB 107 and SB 114 would allow “back-to-back” extended benefit periods for COVID-19-related unemployment claims and regular unemployment claims until the end of the year. Now, there is a waiting period between extended benefits payments and regular state benefits payments.
The legislation also would require unemployed workers who qualify for the federal Pandemic Emergency Unemployment Compensation program (PEUC) to receive the federal payment before the state payment in certain situations. The DES said the provision would allow the state to exhaust federal benefits first, protecting North Carolina’s $2 billion unemployment trust fund.
The bills also extend waivers of some of the temporary COVID-19 unemployment rules until Dec. 31.
The legislation must be approved by the committees and pass both chambers before being sent to Gov. Roy Cooper for final approval.
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