AN ACT reforming the employment security laws by increasing benefit eligibility to a twenty‑six week period and the maximum weekly benefit amount to the sum equal to four hundred forty‑five dollars adjusted annually for inflation, basing the calculation of the benefit amount on the highest paid quarter, increasing benefits allowed for partial unemployment, providing benefits in cases where an individual leaves employment for spousal relocation or health reasons or due to an undue hardship, authorizing the forgiveness of nonfraudulent overpayments caused by agency error, and establishing a short‑term compensation program to benefit employers and employees.

The General Assembly of North Carolina enacts:

SECTION 1.1.(a)  Increase Weekly Benefit Amount. – G.S. 96‑14.2(a) reads as rewritten:

(a)      Weekly Benefit Amount. – The weekly benefit amount for an individual who is totally unemployed is an amount equal to the wages paid to the individual in the last two completed quarters highest paid quarter of the individual's base period divided by 52 26 and rounded to the next lower whole dollar. If this amount is less than fifteen dollars ($15.00), the individual is not eligible for benefits. The weekly benefit amount may not exceed three hundred fifty dollars ($350.00).four hundred forty‑five dollars ($445.00), adjusted annually for increases in the consumer price index. This adjustment shall be made on January 1 of each year and calculated as the percentage of change between the October Consumer Price Index in the calendar year prior and the December Consumer Price Index in the year most recently ended, calculated to the nearest tenth of one percent (1/10 of 1%), provided that this percentage change is positive. For the purposes of this subsection, the term consumer price index means the Consumer Price Index for All Urban Consumers (CPI‑U), U.S. City Average, all items, not seasonally adjusted, standard reference base, as published by the Bureau of Labor Statistics of the U.S. Department of Labor.

SECTION 1.1.(b)  Reform Partial Weekly Benefit. – G.S. 96‑14.2(b) reads as rewritten:

(b)      Partial Weekly Benefit Amount. – The weekly benefit amount for an individual who is partially unemployed or part‑totally employed is the amount the individual would receive under subsection (a) of this section if the individual were totally unemployed, reduced by the amount of any wages the individual receives in the benefit week in excess of twenty percent (20%) of the benefit amount applicable to total unemployment. If the total wages payable to an individual for less than full‑time work performed in a week claimed exceed one‑half of the individual's weekly benefit amount, the amount of wages that exceed one‑half of the weekly benefit amount shall be deducted from the benefits payable to the claimant. If the amount so calculated is not a whole dollar, the amount must be rounded to the next lower whole dollar. Payments received by an individual under a supplemental benefit plan do not affect the computation of the individual's partial weekly benefit.

SECTION 2.1.  Increase Duration of Benefits. – G.S. 96‑14.3 reads as rewritten:

§ 96‑14.3.  Duration of benefits.

(a)        Duration. – The number of weeks an individual is allowed to receive unemployment benefits depends on the seasonal adjusted statewide unemployment rate that applies to the six‑month base period in which the claim is filed. One six‑month base period begins on January 1 and one six‑month base period begins on July 1. For the base period that begins January 1, the average of the seasonal adjusted unemployment rates for the State for the preceding months of July, August, and September applies. For the base period that begins July 1, the average of the seasonal adjusted unemployment rates for the State for the preceding months of January, February, and March applies. The Division must use the most recent seasonal adjusted unemployment rate determined by the U.S. Department of Labor, Bureau of Labor Statistics, and not the rate as revised in the annual benchmark.

Seasonal Adjusted                                 Number

Unemployment Rate                               of Weeks

Less than or equal to 5.5%                           12

Greater than 5.5% up to 6%                         13

Greater than 6% up to 6.5%                         14

Greater than 6.5% up to 7%                         15

Greater than 7% up to 7.5%                         16

Greater than 7.5% up to 8%                         17

Greater than 8% up to 8.5%                         18

Greater than 8.5% up to 9%                         19

Greater than 9%                                           20

(a1)      Maximum Duration. – An eligible individual is entitled to receive unemployment benefits for a maximum period of 26 weeks, unless the benefit period is extended expressly by State or federal law.

(b)        Total Benefits. – The total benefits paid to an individual equals the individual's weekly benefit amount allowed under G.S. 96‑14.2 multiplied by the number of weeks allowed under subsection (a) of this section.26.

SECTION 3.1.  Recognize Spousal Relocation and Undue Hardships. – G.S. 96‑14.8 reads as rewritten:

§ 96‑14.8.  Military spouse relocation Spousal relocation, undue family hardship, health reasons, and domestic violence are good causes for leaving.

An individual is not disqualified for benefits for leaving work for one of the reasons listed in this section. Benefits paid on the basis of this section are not chargeable to the employer's account:

(1)        Military spouse relocation. – Leaving work to accompany the individual's spouse to a new place of residence because the spouse has been reassigned from one military assignment to another.

(2)        Domestic violence. violence; sexual offense; stalking. – Leaving work for reasons of domestic violence violence, a sexual offense, or stalking if the individual reasonably believes that the individual's continued employment would jeopardize the safety of the individual or of any member of the individual's immediate family. For purposes of this subdivision, an individual is a victim of shall verify that they are experiencing or have experienced domestic violence if violence, a sexual offense, or stalking by reasonable documentation, including, but not limited to, one or more of the following applies:following:

a.         The individual has been adjudged an aggrieved party as set forth by Chapter 50B of the General Statutes.

b.         There is evidence of domestic violence, sexual offense, or stalking. Evidence of domestic violence, sexual offense, or stalking may include any one or more of the following:

1.         Law enforcement, court, or federal agency records or files.

2.         Documentation from a domestic violence or sexual assault program if the individual is alleged to be a victim of domestic violence or sexual assault.

3.         Documentation from a religious, medical, or other professional from whom the individual has sought assistance in dealing with the alleged domestic violence, sexual abuse, or stalking.

c.         The individual has been granted program participant status pursuant to G.S. 15C‑4 as the result of domestic violence committed upon the individual or upon a minor child with or in the custody of the individual by another individual who has or has had a familial relationship with the individual or minor child.

(3)        Health reasons. – Where an individual leaves work due solely to their own or a family member's disability or other health condition, whether or not related to the work, and the individual shows:

a.         That, at the time of leaving, the individual, their minor child who is in their legally recognized custody, their parent, or any other member of the individual's immediate family was experiencing a disability or health condition.

b.         The individual had notified the employer of the disability or health condition prior to leaving.

c.         The individual's reason for leaving was directly related to the disability or health condition.

d.         The individual's employer did not offer alternate work, or the alternative work offered did not pay minimum wage or at least eighty‑five percent (85%) of the individual's wage, whichever is greater.

(4)        Undue family hardship. – Arises when an individual leaves work or is unable to accept a particular shift because the individual needs to provide care for (i) a minor child under 14 years of age who is in the legally recognized custody of the individual or (ii) a parent or other immediate family member with a disability or serious health condition and no other care option is available.

(5)        Spousal relocation. – Leaving work to accompany the claimant's spouse to a new place of residence where the spouse has secured work in a location that is too far removed for the claimant reasonably to continue to work.

SECTION 4.1.(a)  Forgive Overpayment Through Division Error. – G.S. 96‑18(g)(2) reads as rewritten:

(2)      Any person who has received any sum as benefits under this Chapter by reason of the nondisclosure or misrepresentation by him the person or by another of a material fact (irrespective of whether such the nondisclosure or misrepresentation was known or fraudulent) or has been paid benefits to which he the person was not entitled for any reason (including (except errors on the part of any representative of the Division) shall be liable to repay such sum to the Division as provided in subdivision (3) of this subsection.

SECTION 4.1.(b)  Noncharge Overpayment. – G.S. 96‑18.1 reads as rewritten:

§ 96‑18.1.  Attachment and garnishment of fraudulent overpayment.overpayment; noncharging and forgiveness of nonfraudulent overpayment.

(a)        Applicability. – This section applies Subsections (a) through (d) of this section apply to an individual who has been provided notice of a determination or an appeals decision finding that the individual, or another individual acting in the individual's behalf and with the individual's knowledge, has knowingly done one or more of the following to obtain or increase a benefit or other payment under this Chapter:

…

(e)        Nonfraudulent Overpayment. – No benefit charges shall be made to the account of any employer where benefits are paid as the result of a decision by the Division if the decision to pay benefits is ultimately reversed; nor shall the benefits paid be deemed to constitute an overpayment under G.S. 96‑18(g)(2).

SECTION 5.1.  Chapter 96 of the General Statutes is amended by adding a new Article to read:

Article 6.

Short‑Time Compensation Program.

§ 96‑45.  Definitions.

The following definitions apply in this Article:

(1)        Affected unit. – A specific plant, department, shift, or other definable unit of an employing unit that has at least two employees to which an approved short‑time compensation plan applies.

(2)        Approved short‑time compensation plan. – A plan that is approved by the Division as provided by this Article.

(3)        Health and retirement benefits. – Employer‑provided health benefits and retirement benefits under a defined benefit pension plan as defined in section 414(j) of the Internal Revenue Code, contributions under a defined contribution plan as defined in section 414(i) of the Internal Revenue Code, or that are incidents of employment in addition to the cash remuneration earned.

(4)        Program. – Short‑time compensation program established pursuant to this Article.

(5)        Short‑time compensation. – The unemployment benefits payable to employees in an affected unit under an approved short‑time compensation plan, as distinguished from the unemployment benefits otherwise payable under the unemployment compensation provisions of State law.

(6)        Short‑time compensation plan. – A plan submitted by an employer for approval by an affected unit of the employer to avert layoffs.

(7)        Unemployment compensation. – The unemployment benefits payable under this Article other than short‑time compensation and includes any amounts payable pursuant to an agreement under any federal law providing for compensation, assistance, or allowances with respect to unemployment.

(8)        Usual weekly hours of work. – The usual hours of work for full‑time or part‑time employees in the affected unit when that unit is operating on its regular basis, not to exceed 40 hours and not including hours of overtime work.

§ 96‑46.  Application to participate in short‑time compensation program.

(a)        An employer that wishes to participate in the Program shall submit to the Division a signed, written short‑time compensation plan for approval. The Division shall develop an application form to request approval of a plan and an approval process. The application shall include:

(1)        The affected unit or units covered by the plan, including the number of full‑time or part‑time workers in the unit, identification of each individual employee in the affected unit by name, social security number, and the employer's unemployment tax account number, and any other information required by the Division to identify plan participants.

(2)        A description of how workers in the affected unit will be notified of the employer's participation in the plan if the application is approved, including how the employer will notify those workers in a collective bargaining unit, as well as any workers in the affected unit who are not in a collective bargaining unit. If the employer will not provide advance notice to workers in the affected unit, the employer shall explain in a statement in the application why it is not feasible to provide the notice.

(3)        A requirement that the employer identify the usual weekly hours of work for employees in the affected unit and the specific percentage by which their hours will be reduced during all weeks covered by the plan. An application shall specify the overall work reduction for which a short‑time compensation application may be approved, which shall be not less than ten percent (10%) and not more than sixty percent (60%) of the usual work hours during that period. If the plan includes any week for which the employer regularly provides no work due to a holiday or other plant closing, then the week shall be identified in the application. Notwithstanding the other provisions of this subdivision, an employer shall be allowed some weeks of complete plant shutdown in appropriate industries or given certain modes of operation.

(4)        Certification by the employer that, if the employer provides health benefits and retirement benefits to any employee whose usual weekly hours of work are reduced under the Program, the benefits will continue to be provided to employees participating in the Program under the same terms and conditions as though the usual weekly hours of the employee had not been reduced or to the same extent as other employees not participating in the Program. For defined benefit retirement plans, the hours that are reduced under the plan shall be credited for purposes of participation, vesting, and accrual of benefits as though the usual weekly hours of work had not been reduced. The dollar amount of employer contributions to a defined contribution plan that are based on a percentage of compensation may be less due to the reduction in the employee's compensation. However, an application may contain the required certification when a reduction in health and retirement benefits scheduled to occur during the duration of the plan will be applicable equally to employees who are not participating in the Program and to those employees who are participating.

(5)        Certification by the employer that the aggregate reduction in work hours is in lieu of layoffs, whether temporary or permanent layoffs or both.

(6)        Agreement by the employer to (i) furnish reports to the Division relating to the proper conduct of the plan, (ii) allow the Division access to all records necessary to approve or disapprove the plan application and, after approval of the plan, monitor and evaluate the plan, and (iii) follow any other directives the Division deems necessary for the agency to implement the plan and that are consistent with the requirements for plan applications.

(7)        Certification by the employer that participation in the plan and its implementation is consistent with the employer's obligations under applicable federal and State laws.

(8)        Certification by the employer that any affected bargaining unit agrees with the plan.

(9)        The effective date and duration of the plan, which shall expire no later than the end of the twelfth full calendar month after the effective date.

(10)      Any other provision added to the application by the Division that the U.S. Secretary of Labor determines to be appropriate for the purpose of this Program.

(b)        Regarding employers in appropriate industries or that have certain modes of operation, and only if the employer demonstrates good cause, the Division may allow flexibility in the application process in cases where it is reasonable not to require specific dates and hours in the application, notwithstanding the provisions of subsection (a) of this section.

§ 96‑47.  Approval and disapproval of plan.

The Division shall approve or disapprove a short‑time compensation plan in writing within 30 days of its receipt and promptly communicate the decision to the employer. A decision disapproving the plan shall clearly identify the reasons for the disapproval. The disapproval shall be final, but the employer shall be allowed to submit another plan for approval not earlier than 90 days from the date of the disapproval.

§ 96‑48.  Effective date and duration of plan.

A short‑time compensation plan shall be effective on the date that is mutually agreed upon by the employer and the Division, which shall be specified in the notice of approval to the employer. The plan shall expire on the date specified in the notice of approval, which shall be either the date at the end of the twelfth full calendar month after its effective date or an earlier date mutually agreed upon by the employer and the Division. However, if a short‑time compensation plan is revoked under G.S. 96‑44, the plan shall terminate on the date specified in the Division's written order of revocation. An employer may terminate a plan at any time upon written notice to the Division. Upon receipt of notice from the employer, the Division shall promptly notify each member of the affected unit of the termination date. An employer may submit a new application to participate in another plan at any time after the expiration or termination date.

§ 96‑49.  Revocation of approval of plan.

(a)        The Division may revoke approval of a short‑time compensation plan for good cause at any time. The revocation order shall be in writing and shall specify the reasons for the revocation and the date the revocation is effective. The Division shall state clearly the reasons for the revocation.

(b)        The Division may periodically review the operation of each employer's plan to assure that no good cause exists for revocation of the approval of the plan. Good cause shall include, but not be limited to, failure to comply with the assurances given in the plan, unreasonable revision of productivity standards for the affected unit, conduct or occurrences tending to defeat the intent and effective operation of the plan, and violation of any criteria on which approval of the plan was based.

§ 96‑50.  Modification of approved plan.

(a)        An employer may request a modification of an approved plan by filing a written request to the Division. The request shall identify the specific provisions proposed to be modified and provide an explanation of why the proposed modification is appropriate for the plan. The Division shall approve or disapprove the proposed modification in writing within 30 days of receipt and promptly communicate the decision to the employer.

(b)        The Division, in its discretion, may approve a request for modification of the plan based on conditions that have changed since the plan was approved, provided that the modification is consistent with and supports the purposes for which the plan was initially approved. A modification shall not extend the expiration date of the original plan, and the Division shall promptly notify the employer whether the plan modification has been approved and, if approved, the effective date of modification.

(c)        An employer is not required to request approval of a plan modification if the change is not substantial, but the employer shall report every change to the plan to the Division promptly and in writing. The Division may terminate an employer's plan if the employer fails to meet this reporting requirement. If the Division determines that the reported change is substantial, the Division shall require the employer to request a modification to the plan.

(d)       The Division shall use its best efforts to provide for timely and flexible modifications. The provisions of this section shall be liberally construed so as to provide the most flexibility for employers and the Division in order to carry out the purposes of this Article.

§ 96‑51.  Eligibility for short‑time compensation.

An individual is eligible to receive short‑time compensation with respect to any week only if the individual is monetarily eligible for unemployment compensation, not otherwise disqualified for unemployment compensation, and:

(1)        During the week, the individual is employed as a member of an affected unit under an approved short‑time compensation plan, which was approved prior to that week, and the plan is in effect with respect to the week for which short‑time compensation is claimed;

(2)        Notwithstanding any other provisions of this Chapter relating to availability for work and actively seeking work, the individual is available for the individual's usual hours of work with the short‑time compensation employer, which may include, for purposes of this section, participating in training to enhance job skills that is approved by the Division as employer‑sponsored training or training funded under the Workforce Investment Act of 1998; and

(3)        Notwithstanding any other provision of law, an individual covered by a plan is deemed unemployed in any week during the duration of the plan if the individual's remuneration as an employee in an affected unit is reduced based on a reduction of the individual's usual weekly hours of work under an approved short‑time compensation plan.

§ 96‑52.  Benefits.

(a)        The short‑time compensation weekly benefit amount shall be the product of the regular weekly unemployment compensation amount for a week of total unemployment multiplied by the percentage of reduction in the individual's usual weekly hours of work.

(b)        An individual may be eligible for short‑time compensation or unemployment compensation, as appropriate, except that no individual shall be:

(1)        Eligible for combined benefits in any benefit year in an amount more than the maximum entitlement established for regular unemployment compensation; and

(2)        Paid short‑time compensation benefits for more than 52 weeks under a plan.

(c)        The short‑time compensation paid to an individual shall be deducted from the maximum entitlement amount of regular unemployment compensation established for the individual's benefit year.

(d)       Provisions applicable to unemployment compensation claimants shall apply to short‑time compensation claimants to the extent that they are not inconsistent with the Program's provisions. An individual who files an initial claim for short‑time compensation benefits shall receive a monetary determination.

(e)        The following provisions apply to individuals who work for both a short‑time compensation employer and another employer during weeks covered by the approved short‑time compensation plan:

(1)        If combined hours of work in a week for both employers do not result in a reduction of at least ten percent (10%) or, if higher, the minimum percentage of reduction required to be eligible for a short‑time compensation benefit as provided in this Article, of the usual weekly hours of work with the short‑time employer, the individual shall not be entitled to benefits under these short‑time compensation provisions.

(2)        If the combined hours of work for both employers results in a reduction equal to or greater than ten percent (10%) or, if higher, the minimum percentage reduction required to be eligible for a short‑time compensation employer, the short‑time compensation benefit amount payable to the individual is reduced for that week and is determined by multiplying the weekly unemployment benefit amount for a week of total unemployment by the percentage by which the combined hours of work have been reduced by ten percent (10%) or, if higher, the minimum percentage reduction required to be eligible for a short‑time compensation benefit as provided in this Article, or more of the individual's usual weekly hours of work. A week for which benefits are paid under this subdivision shall be reported as a week of short‑time compensation.

(3)        If an individual worked the reduced percentage of the usual weekly hours of work for the short‑time compensation employer and is available for all of his or her usual hours of work with the short‑time compensation employer, and the individual did not work any hours for the other employer, either because of the lack of work with that employer or because the individual is excused from work with the other employer, the individual shall be eligible for short‑time compensation for that week. The benefit amount for the week shall be calculated as provided in subsection (a) of this section.

(f)        An individual who is not provided any work during a week by the short‑time compensation employer, or any other employer, and who is otherwise eligible for unemployment compensation shall be eligible for the amount of regular unemployment compensation to which the individual would otherwise be eligible.

(g)        An individual who is not provided any work by the short‑time compensation employer during a week, but who works for another employer and is otherwise eligible, may be paid unemployment compensation for that week subject to the disqualifying income or other provision applicable to claims for regular compensation.

§ 96‑53.  Charging short‑time compensation benefits.

Short‑time compensation shall be charged to employers' experience rating accounts in the same manner as unemployment compensation is charged under this Chapter. Employers liable for payments in lieu of contributions shall have short‑time compensation attributed to service in their employ in the same manner as unemployment compensation is attributed.

§ 96‑54.  Extended benefits.

An individual who has received all of the short‑time compensation or combined unemployment compensation and short‑time compensation available in a benefit year shall be considered an exhaustee for purposes of extended benefits, and if otherwise eligible under those provisions, shall be eligible to receive extended benefits.

§ 96‑55.  Severability.

If any provision of this Article is found by the U.S. Department of Labor to be in violation of federal law, the finding shall render the provision of this Article inoperative, but the finding shall not invalidate the remaining provisions of this Article and is confined in its operation to the specific provision found to be in violation of federal law.

SECTION 6.1.  Effective Dates. – Unless otherwise provided, this act is effective when it becomes law, with:

(1)        Sections 1.1, 2.1, and 3.1 of this act applying to claims for unemployment insurance benefits filed on or after that date.

(2)        Section 4.1 of this act applying to nonfraudulent overpayments pending before, or accruing on or after, that date.

(3)        Section 5.1 of this act becoming effective 60 days from the effective date of this act and applying retroactively to claims arising, and to plans submitted, on or after April 15, 2023.