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North Carolina lawmakers are weighing an uptick in unemployment payments, proposing a bill that would raise the cap from $350 to $450 weekly.
House Bill 48, which was heard and approved by the House Finance committee on Tuesday, comes months after an executive order boosted unemployment payments to a $600 weekly cap following Hurricane Helene. That increase is set to expire on March 1.
“We have created a very healthy (unemployment) fund,” said Rep. Julia Howard (R-Davie), who is co-sponsoring the bill. “I think it’s reasonable to think the fund will sustain itself at $400 a week.”
Entering the hearing, the new increased rate was set at $400. But a Democrat-led amendment to bump it to $450 found unanimous support Tuesday.
“We’re putting more of our money back into our economy instead of letting it sit there,” said Rep. Deb Butler (D-New Hanover), who proposed the change.
Howard said she wasn’t opposed to the change — acknowledging that before discussing the proposal with the Senate, she had favored a higher increase.
“When it goes to the Senate, I have no clue what changes they might make to it,” Howard said.
Under current North Carolina law, the state pays out 12 weeks of unemployment insurance, with weekly payments set at 50% of an individual’s prior wages. Those payments are currently capped, however, at $350 per week.
The bill would not impact those who have already filed for higher payments after Helene, legislative staff said Tuesday. Those people’s weekly rates were set in their first week of payments.
Federal disaster money has also funded an additional 14 weeks of unemployment payments for Helene-impacted counties in the mountains.
Democrats push back on executive order limits
Former Gov. Roy Cooper, shortly after Helene devastated western North Carolina, issued an executive order adding a $250 bonus to that 50% base rate, and raised the weekly cap to $600.
That order expires when the state’s disaster declaration for Helene does — on March 1. The bill both ratifies Cooper’s order — but also says that he did not have the authority to issue it in the first place.
“It’s questionable, but we don’t think he had the authority,” Howard said of Cooper’s order. “But we felt that it was necessary that we do ratify, and at the same time show a definite termination date.”
But Democrats expressed concern Tuesday that the part of the bill ending Cooper’s executive order could also hamper future efforts to boost unemployment after disasters.
“The challenge that I see, and worry about, is the governor can act a lot faster than this body generally does,” said Rep. Eric Ager (D-Buncombe).
Butler also proposed an amendment Tuesday to remove that section from the bill. It was voted down by Republicans on the committee.
Tax credit for employers paying into UI fund
North Carolina’s unemployment fund is funded through assessments on businesses, who pay into the fund at varying rates.
The bill being considered would also create a tax credit for those employers. That credit would be equal to the amount the employer paid toward the fund in the fourth quarter of 2024.
As of 2023, North Carolina’s unemployment trust fund sits at $5 billion.
NC’s UI benefits were lowered in 2013
More than a decade ago, lawmakers passed a bill significantly shortening how long the state pays out unemployment.
The 2013 law cut the total length from 26 weeks to a range of 12 to 20 weeks, depending on the employment rate. It also set the current weekly cap of $350.
The current length of 12 weeks is triggered anytime the unemployment rate is below 5.5%.
Those changes came as lawmakers sought to dig out of a federal loan — taken out to cover a wave of unemployment claims stemming from the 2007-08 recession.
“That’s when we were really in a world of hurt,” Howard said. “That’s when we redrafted the state plan and made a lot of changes to it.”
Critics of the current plan have argued it is among the least generous in the nation — and that North Carolina’s current fund and growth could safely allow for higher payments.
Advocates have previously urged the General Assembly to increase the duration of benefits back to 26 weeks; to increase the maximum cap; and to change the way weekly benefits are calculated, among other measures.
HB 48 now heads to the powerful House Rules Committee, where it will need to win approval before it can be considered by the full House of Representatives.