The state of North Carolina legislature, over the veto of Governor Beverly Perdue, enacted Senate Bill (SB) 532, “An Act to Reform the Employment Security Laws of North Carolina by Creating the Division of Employment Security Within the Department of Commerce, Transferring the Functions of the Employment Security Commission to that Division, Making the Division Subject to Rule Making Under Article 2A of Chapter 150B of the General Statutes, and by Making Other Modifications and Conforming Changes to Align the Employment Security Functions of State Government Under the Direct Leadership of The Secretary of Commerce.”
Governor Purdue Comments on Her Veto of SB 532
Governor Perdue issued the following statement in conjunction with her veto of SB 532:
In Executive Order No. 85, I called for the transfer of the Employment Security Commission to the Department of Commerce for administrative purposes as a way to streamline State government. The General Assembly agreed with this idea by placing a provision in its budget bill directing that such a transfer take place. However, SB 532 goes far beyond an administrative transfer and proceeds to radically change the way that unemployment benefits are administered in this State — doing so in a way that calls into question the fairness of the entire process. As a result of these drastic changes, we have been informed by the United States Department of Labor (DOL) that any finding of a lack of conformity between this bill and federal law will result in North Carolina’s loss of money for its unemployment insurance program and that this bill will also raise taxes on all employers statewide who pay federal unemployment taxes. I cannot allow a bill to become law that will endanger our receipt of these much-needed federal funds for our unemployed citizens. Nor am I willing to approve this increased tax on our State’s employers.
House Speaker Thom Tillis Responded to Governor Perdue’s Veto
House Speaker Thom Tillis (R-Mecklenburg) released the following statement concerning the veto override of SB 532:
SB 532 originally passed the House with 104 votes, and I am pleased it was passed into law today. This bill streamlines the agency responsible for employment security in North Carolina, and brings more efficiency to the administration of unemployment benefits. It makes the system fairer for employers and unemployed citizens, while reforming portions of a system that has been plagued by fiscal mismanagement. This bill does not raise taxes; in fact, it is one of a series of steps necessary to eventually reduce the unemployment tax penalties paid by the employers. Finally, the ESC and the Governor still have the power to address any concerns by the DOL. This is a pro-business piece of legislation that provides much-needed clarity for businesses and their employees when facing the prospect of unemployment.
Impact of SB 532 on North Carolina Unemployment Law
The significant provisions of SB 532 include the following:
- Creation of a new Division of Employment Security within the Department of Commerce,
- Extension of the time allowed an employer from ten days to thirty days from mailing or delivery of the notice of claim filed to protest the claim,
- Expansion of the term “misconduct connected with work” to include termination or suspension “from employment after arrest or conviction for an offense involving violence, sex crimes, or illegal drugs,”
- Imposition of a total disqualification of benefits for “the failure to adequately perform any other employment duties as evidenced by no fewer than three written reprimands received in the 12 months immediately preceding the employee’s termination,” and
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