North Carolina currently faces a more than $2 billion debt to the federal government for loans used to fund the state’s share of unemployment compensation. Only employers pay into the Unemployment Insurance (UI) fund, hence they are obligated to pay the debt through state and federal unemployment payments. The North Carolina Chamber, along with a coalition of dozens of businesses, local chambers and allied business organizations, made fixing our state’s broke and broken UI system its number one priority – shaping solutions that address affordability, integrity and solvency. With bipartisan support, the General Assembly passed legislation that more effectively connects North Carolina’s unemployed citizens with jobs, shifting the focus from unemployment to reemployment. Additionally, it gives employers greater certainty by putting a plan in place to repay the more than $2 billion debt in three years. On February 19, Governor McCrory signed House Bill 4: UI Fund Solvency & Program Changes.
REAL SOLUTIONS: House Bill 4: UI Fund Solvency & Program Changes
Trust Fund Solvency
Creates new “Employment Security Reserve Fund” used solely to pay down debt
Provides employers needed certainty by implementing three-year debt repayment plan vs. seven-year “do-nothing” approach
Increases minimum and maximum SUTA tax rate on employers by .06% (Effective January 1, 2014)
Ensures long-term solvency by increasing the trigger in the UI Trust Fund to $1 billion for the collection and suspension of 20% SUTA surtax (Effective July 1, 2013)
Improve Program Integrity
Analyzes each unemployment claim individually to determine proper fault
Clearly defines suitable work
Requires a waiting week for each file claimed to ensure validity (Effective July 1, 2013)
Unemployment to Reemployment
Reforms and streamlines workforce training dollars, boards and commissions
Develops Trade Jobs for Success program and expands reemployment services, vocational school and training programs
Establishes new enforcement on able, available and actively seeking work requirements
Establishes a Joint Legislative Oversight Committee on Unemployment Insurance
Affordability Solutions
Aligns benefit duration and amount with surrounding states to make North Carolina more competitive (Effective July 1, 2013)
Ties the duration of benefits to the seasonally adjusted unemployment rate (Effective July 1, 2013)
Resources
Chamber Out Front
> North Carolina Chamber thanks NC House, NC Senate and Governor McCrory for their commitment to getting our unemployed citizen back to work.
> NC Chamber testimony before the North Carolina Joint Revenue Laws Study Committee (11/8/2012)
> Local employers see debt time bomb; read the full story on BlueRidgeNow.
> NC Chamber met with The News & Observer to highlight the magnitude and impact on job creation that the massive UI debt is producing.
> NC Chamber submitted opinion articles to The News & Observer and Wilmington Star News that highlighted the major dangers this crisis poses to economic recovery and outlined the comprehensive solutions proposed in the NC Chamber study.
> Chamber President Lew Ebert talked to News 14 Capital Tonight about how a solvent and competitive UI system will help reemployment.
> Gary Salamido, vice president of governmental affairs for the Chamber, sat down with Laura Leslie of WRAL to discuss the importance of comprehensive reform.
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