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State bill would restart work search requirement for non-COVID-19 related job losses

State bill would restart work search requirement for non-COVID-19 related job losses

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Federal Reserve Chair Jerome Powell underscored the U.S. economy's ongoing weakness Tuesday in remarks that suggested that the Fed sees no need to alter its ultra-low interest rate policies anytime soon.

A state House bill advanced Thursday would restart the work search requirement for individuals whose job loss is not related to COVID-19.

Republican-sponsored House Bill 107 also would restore the one-week waiting period for benefits to begin for non-COVID-19 job losses.

HB107 was recommended by the House Finance committee to the Rules and Operations committee.

There is companion legislation in Senate Bill 114 that has yet to be heard in committee. Both bills would go into effect when signed into law.

Among the first pandemic steps taken by Gov. Roy Cooper in March was issuing an executive order that he said would “take down some barriers to unemployment benefits.”

Among the key elements of Executive Order No. 118:

Removing the requirement that recipients have to look for work during the benefits period.

Waiving the one-week waiting period to receive benefits.

Allowing applicants to file for benefits if they are subject to reduced hours as well as being laid off.

The executive order remains in effect until either being rescinded by Cooper, amended by another executive order or the state of emergency declaration ends.

However, the state Division of Employment Security has the authority to reactivate the work search requirements.

Antoine Keith, the state Department of Employment Security’s senior deputy of programs, told the committee that the state economy has improved enough in recent months, including a significant decline in initial state unemployment claims, to warrant the restart of the two requirements.

Daily initial state and federal UI claims have ranged between 2,000 and 7,000 most of February.

Keith said DES hasn’t taken that restart step yet because it is working to assure that the resumption of the two requirements would not affect COVID-19 related job losses and furloughs.

“It’s going to take some time” to adjust the UI benefit system “so that those (COVID-19 related) individuals don’t get caught up” in the changes, Keith said.

‘Half the equation’

Rep. Deb Butler, D-New Hanover, said “that while the bill is well-intentioned, it does feel like half of the equation.”

Butler said that along with restarting the two requirements, legislators ought to make additional unemployment benefit changes that include adding additional benefit weeks.

A sliding scale for weekly unemployment benefits was put into place by the Republican super-majority in July 2013.

The scale goes from a maximum of 12 weeks to a maximum of 20 weeks, depending on the state unemployment rate as measured twice a year.

On Jan. 1, the sliding scale went from 12 to 16 weeks for new claimants. The 16-week period remains in effect through July 1, when a new measurement takes effect.

Butler said that with the state unemployment insurance trust fund being solvent since 2015, legislators’ focus should be on providing adequate benefits for the unemployed.

“In North Carolina, we pay too little for too short of a duration for too few people,” Butler said. “That’s nothing to be proud of.”

Rep. John Szoka, R-Cumberland, responded by saying N.C. unemployment benefits are competitive with other states in the Southeast.

Butler said Louisiana and Mississippi should not be factored in to measuring the state’s UI competitiveness, but rather just N.C.’s neighboring states.

Other aspects

Bill sponsors, which includes primary sponsor Rep. Julia Howard, R-Davie, emphasized the employer benefit during Thursday’s meeting.

The bill would keep employers’ contribution base rate at 1.9% for the state’s unemployment tax for 2021. A rate increase is scheduled for this year.

Employers pay a tax into the state’s UI system between 0.06% and 5.76%. Employers can pay a higher rate based on their history of job cuts and layoffs.

Alexandra Sirota, director of the left-leaning N.C. Budget and Tax Center, said the bill "ignores the desperate need to repair and improve the system for jobless workers and, indeed, erects another barrier by reviving administratively costly work search requirements."

"By keeping employer taxes low while refusing to improve things for workers and their families, lawmakers have signaled that working people will continue to be an afterthought in legislative policymaking and are doubling down on an economic approach that will continue to serve us all poorly."

HB107 also would extend eligibility until Dec. 31 for a key federal unemployment insurance program.

The bill would affect the federal pandemic emergency unemployment compensation program, which had expired on Dec. 31, 2020.

The state is required to choose an option for how it will manage the PEUC and regular federal unemployment programs for 2021.

HB107 selects the option that requires individuals whose 12-month benefit period has expired to file a regular initial unemployment claim for a new 12-month benefit period. The benefit period typically begins when an individual files a claim.

However, payments from the new benefit period would be deferred until the claimant’s current PEUC claim “has been exhausted or the PEUC program has expired.”

Payments resumed Jan. 6 for at least 11 weeks for North Carolinians with eligibility remaining for the PEUC and federal Pandemic Unemployment Assistance programs.

The $908 billion federal stimulus package signed into law by then-President Donald Trump on Dec. 27 restored benefits for PUA and PEUC through at least March 13 and payments through April 5.

As of Tuesday, the PUA and PEUC programs had paid a combined $1.9 billion in benefits to North Carolinians, including $960 million from PEUC.

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