RALEIGH — A new law reducing unemployment benefits will get some tweaks this week after the U.S. Department of Labor identified several provisions that don’t comply with federal regulations.
Gay Gilbert, administrator of the federal Office of Unemployment Insurance, wrote that North Carolina can’t deny benefits to certain categories of out-of-work applicants. But Gilbert says the state is within its rights to cut maximum unemployment benefits from $535 a week to $350 and to reduce the maximum weeks of benefits from the current 26 – the main effects of the new law.
“We’re taking it seriously, but there’s nothing egregious in (the letter),” Rep. Julia Howard, a Mocksville Republican who helped craft the original bill, said Saturday. “I was pleasantly surprised that there were only five or six glitches.”
But Sen. Josh Stein – a Raleigh Democrat who opposed the cuts to unemployment – said the bill wasn’t fully vetted.
“It’s a very clear example that when you rush things through you end up creating unintended problems,” he said Saturday, noting that employers will be forced to pay higher unemployment taxes if the law isn’t fixed.
Howard says businesses needn’t worry because lawmakers are already working on a solution.
“We’ll have that out next week,” Howard said. “It’s just wording in most all of the cases.”
The federal critique could, however, impact who’s eligible to receive unemployment benefits. Overall, an estimated 70,000 people were dropped from the system on July 1.
Gilbert’s July 9 letter says North Carolina’s new law denies or limits benefits to applicants who quit their jobs voluntarily, aren’t seeking work while taking an approved training program, or who work at an “educational institution.”
Those provisions, Gilbert writes, “are not in conformity with the Federal Unemployment Compensation law.” North Carolina is required to take action within 30 days or lose its eligibility for unemployment tax credits.
N.C. Department of Commerce spokesman Josh Ellis says the mandated tweaks will have few, if any, effects on who gets unemployment.
“These are relatively technical fixes,” he said. “We don’t anticipate this to have any budgetary impact.”
But Stein said he thinks the letter might put a few people back on unemployment rolls.
“If they get fixed, I think it can help some people on the margins, but it doesn’t change the fundamental aspects of the bill,” he said.
Stein says Democrats will vote for the changes – provided they’re not tacked on unrelated legislation.
The labor department letter also presents the state with a choice. North Carolina hasn’t historically deducted Social Security benefits from unemployment checks, but Gilbert says that must be spelled out in the new law.
“That’ll be an interesting discussion,” said Bill Rowe, director of advocacy for the N.C. Justice Center, which has lobbied against the law.
And while no federal regulations were violated, Gilbert’s letter also takes aim at the unemployment law’s main provisions limiting maximum benefits. She says the law “may have a negative impact on North Carolina workers,” pointing out that the move prevents workers from receiving extended, federally-funded unemployment benefits that kick in after state-funded benefits run out.
Howard says that criticism is merely “a matter of opinion.” She notes the cuts were necessary to pay back the $2 billion owed to the federal government to cover benefits and “to get our state plan in order.”
Stein, however, sees the critique differently. “I read that section of the letter to say, ‘Have you people lost your senses?’” he said.
Campbell: 919-829-4802 or twitter.com/RaleighReporter