Employment Security Commission (ESC) Chairman Lynn R. Holmes officially notified leaders of the General Assembly on Wednesday that she was suspending certain provisions of Senate Bill 532 because the provisions do not comply with federal law.

US DOL Had Threatened Eligibility of NC Employers to Receive FUTA Credit

In a September 22, 2011, letter from Gay M. Gilbert, Administrator in the Office of Unemployment Insurance of the US Department of Labor (DOL) to Chairman Holmes, the DOL requested that Chairman Holmes use her authority under North Carolina law to suspend certain provisions of the law. If the provisions had not been suspended and the law took effect November 1, 2011, the DOL would not certify North Carolina as in compliance with provisions of the FUTA Unemployment Tax Act (FUTA) and the Social Security Act (SSA). Without this certification, employers in North Carolina would not be eligible to receive the FUTA credit on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Four Points of Law Found in Conflict

There were four parts of the law that the DOL had considered in relation to conformity issues. They are:

1. A provision that would allow employers thirty days to respond to a claim notice;
2. A provision that would permit the total reduction of benefit rights if an individual is arrested for or convicted of certain criminal behavior;
3. A provision that would permit an individual to be totally disqualified for unsatisfactory performance; and
4. A provision that would permit parties to waive the right to an appeal hearing by entering stipulations resolving the issues of an appeal.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the suspension of North Carolina law by Chairman Holmes.