Want to Read More? To continue reading this article, please Log in or Register Now

Unemployment Insurance: North Carolina

Unemployment Insurance requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Nancy Hatch Woodward, Nancy Hatch Woodward Communications

Summary

  • Most employers are subject to North Carolina's Employment Security Law. See Unemployment Insurance.
  • Claimants must meet certain requirements in order to be eligible for unemployment benefits. See Eligibility.
  • Certain forms of remuneration, such as severance pay, may affect unemployment benefits. See Disqualification.
  • Unemployment benefits may last for up to 20 weeks. See Benefits.
  • Employers must maintain certain records related to unemployment compensation. See Recordkeeping.
  • Employers must provide employees access to unemployment benefits information. See Notice Requirement.

Unemployment Insurance

Most employers doing business in North Carolina are subject to the North Carolina Employment Security Law, which is administered by the North Carolina Division of Employment Security (Division). Covered employers pay contributions into the unemployment trust fund. Contribution rates may vary based on the claims experience of the employer. +N.C. Gen. Stat. § 96-9.2.

In some circumstances, an employer is not subject to unemployment taxes and unemployment insurance is not available to its employees. Examples of types of workers not eligible for North Carolina unemployment compensation include:

  • Independent contractors;
  • The spouse, parent or child (under the age of 21) of an individual business owner;
  • Employees of a church;
  • Insurance and real estate agents paid solely by commission;
  • Students employed by the school, college or university they attend or who are in work-study programs;
  • Individuals in rehabilitation programs or remunerative work for individuals whose earning capacity is impaired by age, physical or mental deficiency, or injury; and
  • Individuals in unemployment work-relief or work-training programs.

+N.C. Gen. Stat. § 96-1.

Eligibility

Unemployment benefits are paid only to those unemployed individuals who:

  • Are unemployed through no fault of their own;
  • Are able and available to work and are actively seeking work;
  • Have filed a valid claim for benefits;
  • Have registered for work;
  • Have served a one-week waiting period for each new claim filed; and
  • Have satisfied the wage requirements.

+N.C. Gen. Stat. § 96-14.1.

An employee who has left work for the following reasons may be eligible to receive unemployment benefits:

  • To relocate with a military servicemember spouse who has been reassigned to another military assignment; and
  • For reasons of domestic violence if the employee reasonably believes that his or her continued employment would jeopardize the safety of the employee or the employee's immediate family member.

+N.C. Gen. Stat. § 96-14.8.

Disqualification

An individual may be disqualified from receiving unemployment benefits if he or she:

  • Leaves work voluntarily without good cause attributable to the employer;
  • Is discharged for misconduct;
  • Fails to possess a license, certificate, permit, bond or surety that is necessary for the job;
  • Is not working due to a labor dispute;
  • Fails to file a benefits claim;
  • Fails to report at an employment office as requested by the Division;
  • Is not able or available to work or is not actively seeking work; or
  • Fails to accept suitable work when offered.

+N.C. Gen. Stat. § 96-14.5; +N.C. Gen. Stat. § 96-14.6; +N.C. Gen. Stat. § 96-14.7; +N.C. Gen. Stat. § 96-14.9.

Good cause attributable to the employer includes the reduction of work hours to less than 50 percent of customary full-time hours and the permanent reduction of pay by more than 15 percent. +N.C. Gen. Stat. § 96-14.5.

Misconduct includes:

  • Violating the employer's written alcohol or illegal drug policy;
  • Reporting to work significantly impaired by alcohol or illegal drugs;
  • Consuming alcohol or illegal drugs on the employer's premises;
  • Being convicted by a court for manufacturing, selling or distributing a controlled substance if the offense is related to or connected with the employee's work for the employer or violates a reasonable work rule or policy;
  • Termination or suspension from work after an arrest or conviction for an offense involving violence, sex crimes or illegal drugs if the offense is related to or connected with the employee's work for an employer or violates a reasonable work rule or policy;
  • Any physical violence related to the employee's work, including physical violence directed at supervisors, subordinates, co-workers, vendors, customers or the general public;
  • Inappropriate comments or behavior toward supervisors, subordinates, co-workers, vendors, customers or the general public relating to any federally protected characteristic that creates a hostile work environment;
  • Theft in connection with employment;
  • Forging or falsifying any document or data related to employment, including a previously submitted employment application;
  • Violating an employer's written absenteeism policy; and
  • Refusing to perform reasonably assigned work tasks or failing to adequately perform job duties as evidenced by no fewer than three written reprimands in the 12 months immediately preceding the employee's termination.

+N.C. Gen. Stat. § 96-14.6.

In addition, individuals are not eligible for unemployment with respect to full calendar weeks during which they receive (or will receive) wages in lieu of notice, accrued vacation pay, terminal leave pay, severance pay, separation pay, or dismissal payments or wages (by whatever name). +N.C. Gen. Stat. § 96-15.01(c).

Individuals are also ineligible for unemployment for any week in which the individual receives any sum from the employer:

  • According to an order of a court, the National Labor Relations Board or another adjudicative agency; or
  • By private agreement, consent or arbitration for loss of pay due termination.

When the employer pays a lump sum that covers a period of more than one week, the amount paid is allocated to the weeks in the period on a pro rata basis as determined by the Division. If the amount prorated to a week would, if it had been earned by the individual during that week of unemployment, have resulted in a reduced benefit payment, the individual is entitled to receive the reduced payment if the individual is otherwise eligible for benefits.

Benefits paid for weeks of unemployment for which back pay awards or other similar compensation are made constitutes an overpayment of benefits. The employer must deduct the overpayment from the award prior to payment to the employee and must send the overpayment to the Division within five days of the payment for application against the overpayment. Overpayments not remitted to the Division are subject to the same collection procedures as contributions. The removal of charges made against the employer's account as a result of the previously paid benefits applies to the calendar year in which the Division receives the overpayment.

+N.C. Gen. Stat. § 96-14.13.

Effect of Partial Employment

An individual who is employed part time will be paid a partial benefit equal to the difference between his or her weekly benefit amount if he or she were totally unemployed and the earnings for the week for which a benefit is claimed in excess of 20 percent of the benefit amount applicable to total unemployment. +N.C. Gen. Stat. § 96-14.2(b).

Benefits

North Carolina unemployment benefits are available for a maximum of 12 to 20 weeks, depending on the applicable seasonal adjusted statewide unemployment rate. +N.C. Gen. Stat. § 96-14.3; +N.C. Gen. Stat. § 96-14.4(b). Benefits may be extended during times of high unemployment. +N.C. Gen. Stat. § 96-14.14.

Recordkeeping

Every individual or organization employing even one person is required to keep accurate work records about employees that the Secretary of the Division of Employment Security deems necessary. Employers must make these records available to the Division upon request. +N.C. Gen. Stat. § 96-4(i)(1).

Notice Requirement

An employer must provide employees access to information concerning employment benefits by posting a Certificate of Coverage and Notice to Workers (NCESC 524) in a conspicuous place. +N.C. Gen. Stat. § 96-15.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.