STATEMENT FROM THE NC JUSTICE CENTER: Federal letter shows lawmakers must keep NC in compliance with unemployment law

RALEIGH (July 15, 2013) — North Carolina policymakers should take very seriously the recent 13-page letter from the US Department of Labor finding that several parts of NC’s unemployment insurance system overhaul may run afoul with federal requirements. Failure to take the proper action will result in some laid off workers being unjustly denied needed benefits. In addition, NC businesses face the loss of the Federal Unemployment Tax Act (FUTA) credit. This could mean an increase in federal unemployment taxes that would cost businesses approximately $1 billion in additional federal unemployment taxes.

It is no wonder that there are federal conformity issues with the law since HB 4 was rushed through the general assembly with virtually no opportunity for study or consideration by either the public or members of the legislature. The bill’s intent was to reduce unemployment benefits as much as possible. That decision has now landed North Carolina in the position of being out of compliance with federal law.

There are many lessons to be learned from HB 4 and the way it was rushed through the legislative process, not least of which is that HB 4 has caused the loss of $600 million in federal Emergency Unemployment Compensation.

We hope North Carolina policymakers make the necessary changes to keep the state in compliance with federal law so that thousands of North Carolinians who have lost jobs through no fault of their own can receive federal emergency benefits. The consequences of this rushed legislation are being felt already and will continue to ripple through the economy in the weeks and months ahead.

FOR MORE INFORMATION, CONTACT: Jeff Shaw,, 503.551.3615.