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North Carolina Faces Major Cuts in Unemployment Benefits

Updated : February 5th, 2021

Gov. Pat McCrory signed a law on 19th February, 2013 abruptly cutting North Carolina’s unemployment benefits as agencies that deal with unemployed workers anticipated tough times to come.

The law, which takes effect on July 1, makes wide changes. It reduces the maximum unemployment benefit by one-third, from $535 to $350 per week. It reduces the length of benefits from 26 weeks to a descending scale of 12 to 20 weeks, depending on the state unemployment rate. It also eliminates benefits for workers who have to leave a job for health or family reasons.

North Carolina currently has the fifth-highest jobless rate in the nation, at 9.2%, or more than 430,000 workers.

The overhaul, pushed by Republicans in the General Assembly, is intended to repay $2.5 billion the state owes the federal government for past benefits.

Just hours after McCrory signed the changes into law, Kevin Schiffer was among a steady stream of men and women looking for assistance at Charlotte’s Division of Employment Security office off Nations Ford Road.

Schiffer, 39, knows why some Republican legislators believe “deadbeats” have taken advantage of the system. But he believes the law will hurt hard-working people who through no mistake of their own lose jobs and want help.

Two weeks ago, he said, he learned that Source Technologies, where he worked as a quality assurance manager for five years, is moving to Florida. He hopes to land another job before his compensation exhausts. But just in case, he went to the employment security office.

Could Schiffer, who is married with three children, one in college, survive on $350 a week, the maximum benefit under the new bill?

“Absolutely not.”

Bill Rowe of the N.C. Justice Center anticipated the law “will have a drastic effect,” cutting unemployment payments by 60%. “The cuts are unprecedented.”

The alterations will also affect organizations that benefit the jobless, said Louise Mack, president of Prosperity Unlimited, a Kannapolis-based non-profit that has a foreclosure-prevention program.

“We’re going to have to deal with it, too,” Mack said. “It will jeopardize more families and they could go into foreclosure a lot quicker.”

As per the National Employment Law Project, North Carolina is the eighth state to reduce the number of weeks of benefits, but the first to lose federal emergency benefits.

The federal benefits, extending payments past 26 weeks of unemployment, were awarded as part of the “fiscal cliff” deal in Congress. But the federal law needs states to continue their existing benefit structure. The U.S. Department of Labor said 170,000 people will lose an estimated $780 million in benefits in North Carolina because of the new law.

The state law also increases unemployment taxes paid by businesses, partly through the elimination of a 0% rate that around 30,000 businesses were paying. Federal taxes will continue to rise by $21 per employee per year until the debt is repaid and a 20% state surcharge will last a little while longer. By paying off the debt sooner, the fee per employee that businesses bear will end sooner.

Sen. Tommy Tucker of Union County, who voted for the law, said “We have heard from a lot of people that we were insensitive to reduce benefits at a difficult time – which we’re doing it on the backs of the unemployed.”

“The pain,” Tucker said, “goes both ways, for the unemployed and for the businesses that have to pay the bill.”

Tucker owns a mechanical contractor firm that employs 77 workers. He said that under the new law his unemployment insurance payment will triple to $110,033.

“We have to sacrifice … because of the amount of debt and the interest on the debt and the urgency to pay it off,” Tucker said. “It’s a double-whammy effect on employees and also on businesses.”

The state’s debt will be repaid by late 2015 – three years prior than if nothing had been done – and will put more than $2 billion in backup by the end of the decade to pay future claims in the next fiscal recession.

“Shame on our governor”

Dozens of business groups, led by the North Carolina Chamber, backed the overhaul.

Media members couldn’t attend the signing ceremony. But in a statement, McCrory said: “This bipartisan solution will protect our small businesses from continued over-taxation, ensure our citizens’ unemployment safety net is secure and financially sound for future generations and help provide an economic climate that allows job creators to start hiring again.”

MaryBe McMillan with the state AFL-CIO reacted strongly: “As one of the first laws under his tenure, these cruel cuts will forever mar any legacy that Gov. McCrory hopes to leave behind. Only bullies kick people while they are down. Shame on our governor and our legislature for turning their backs on unemployed workers.”

Natalie Suggs, 33, hopes to get a full-time job before the changes take effect. Suggs, who was at Charlotte’s Division of Employment Security office , said she was laid off in October 2011 from her job as a team leader in Wells Fargo’s corporate call center. She obtained a seven-month severance and has gotten by since then on unemployment benefits and a part-time job.

“People who are receiving unemployment insurance did not ask to be on unemployment,” she said. “It’s not a benefit we sought out, and I feel like it’s one of the benefits that shouldn’t be cut.”

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  1. If I’m laid off and I go back to work for three or four weeks and get laid off again do I have to do the one week waiting period before I can collect again?

  2. I was informed by the automated phone system that my claim for last week 06/12/2021 was not processed due to an outstanding issue on said claim. I have tried for four days to reach a human to assist me in this matter. It’s been impossible! Please help.

    1. Anne,

      Wish we could do something for you. This is a private forum. Please continue following up regularly. You can perhaps write them an email.

  3. I am trying to request payments from aug 2015 up until 2017 I never received a debit card and just assumed that I was denied. So i did not request payment but would like to now

    1. Katrina,

      That period is past and you might not be able to claim retroactively. Please write the office an email if you wish to.

  4. Ive provided documents that were needed and i have not receive any type of response i have went without benefits for 6 weeks could someone please contact me

    1. Sondra,

      Please note this is a private forum and we do not have access to your claim. Please follow up with the office directly.

  5. To whom it may concern, Please what is wrong with the site to claim weeks? I am at the Career Source and they said it has been acting up for 2 days. I am frustrated so I can imagine how many others are like me. I was laid off 4/16/2021. My UI is showing active but still under review. Is there anything you need from me to get this going? I will give it to you. Please July rent coming up. I am tapped from asking from family to get me thru now. Please please please any answers for me? I am begging right now. I can not be late on rent or they will not renew my lease when it is time. I can not move, to costly. I have been here for 20 years. Please any suggestions. I will pay back July rent if my UI goes thru. No reason why it shouldn’t. Please help. Thanks again, Kay

    1. Kay,

      It must be a tough time for you. This is a private forum and we do not have access to your claim. Please chase the Office directly.

  6. I just filed for my first weeks benefit and am trying to change the payment method. It does not give me the verify who you are questions?

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