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NC Chamber Applauds Lawmakers for Acting with Unity to Protect North Carolina’s Balanced UI System

On Tuesday, March 30, members of the N.C. General Assembly unanimously passed Senate Bill 114 (DES COVID Modifications and Technical Changes), a pro-recovery, pro-growth bill that earned our support at the NC Chamber due to its balanced treatment of North Carolina’s unemployment insurance (UI) system. Among its chief measures, Senate Bill 114 keeps the base UI contribution rate for experience-rated employers at 1.9 percent, rather than raising this rate – and raising the UI burden on job creators – as originally planned. Shortly after its passage in the legislature, Governor Cooper added his signature to the bill.

“The NC Chamber applauds the lawmakers from both parties who acted with unity to secure this important piece of legislation,” said NC Chamber President and CEO Gary Salamido. “Senate Bill 114 maintains predictability for job creators in anticipating and managing their UI obligations and preserves the integrity and solvency of our UI fund at a critical juncture for our state.”

Other measures contained in Senate Bill 114 will extend COVID-related UI benefits through the end of 2021, allow claimants to make use of “back-to-back” relief periods for COVID-related unemployment and regular unemployment, and reestablish a work search requirement for claimants. Along with its companion bill, House Bill 107, the bill was among the first pieces of legislation to earn the Chamber’s support this session in our weekly This Week at the Capital newsletter, for its clear and present importance to the business community, and to North Carolina’s economic relaunch.

To fully understand this importance, it’s crucial first to understand how our state built its current, balanced UI system.

Back in 2013, North Carolina’s employers, who pay virtually all the taxes that fund our UI system, faced a $2.6 billion UI debt to the federal government for money borrowed during the Great Recession. Recognizing the problem, the NC Chamber and aligned organizations stepped to the plate to help lead bipartisan UI reform efforts. Those efforts, in turn, empowered lawmakers to pass legislation that restored integrity to a collapsing system, reduced the debt-inflated Federal Unemployment Tax (FUTA) on employers, and ultimately replenished North Carolina’s depleted UI fund. There is no doubt that the solvency resulting from those efforts strengthened our ability to weather the employment challenges of COVID-19.

The NC Chamber believes a balanced approach to UI relief is the right thing for North Carolina, serving as it does to keep costs manageable for the job creators fueling our economic growth and to safeguard a solvent UI fund so we can continue to provide employment relief to North Carolinians in need. We commend our state’s leaders for standing with us to protect this essential balance with the passage of Senate Bill 114.

Click here to view our list of UI and tax priorities for the 2021 session, along with the rest of our 2021 legislative agenda.