AN ACT TO MAKE TECHNICAL, ADMINISTRATIVE, AND CLARIFYING CHANGES TO THE UNEMPLOYMENT INSURANCE LAWS.
Part I: Disaster Unemployment Insurance
Makes the following changes to GS Chapter 96, which sets out Employment Security Law. Effective October 1, 2016.
Amends GS 96-11.3(b), which provides for situations where unemployment benefits paid to an individual may not be charged to the individual’s employer’s account where the employer is a period base employer. Currently, the second situation where benefits paid to an individual may not be charged to the employer’s account is where benefits were paid to an individual for unemployment due directly to a major natural disaster declared by the President under the Disaster Relief Act of 1970, and the individual receiving the benefits would have been eligible for disaster unemployment assistance under that federal act if the individual had not received benefits under GS Chapter 96. Updates and replaces the second situation to provide that benefits paid to an individual may not be charged to the employer’s account where they were paid to an individual for unemployment due directly to a disaster covered by a federal disaster declaration. Amends GS 96-1 to define federal disaster declaration to mean a declaration of a major natural disaster by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, provided that the declaration allows disaster unemployment under the federal act.
Amends GS 96-14.1(b), which sets out provisions for a valid claim for unemployment benefits by an individual under GS Chapter 96. Provides an exception for a claim for unemployment due directly to a disaster covered by a federal disaster declaration to the standard one-week waiting period an individual must serve for each claim filed, so that no waiting period applies.
Amends GS 96-14.9, which sets out the provisions for the weekly certification of an individual’s eligibility for unemployment benefits. Adds a new subsection (l) to provide that an individual who is unemployed due directly to a disaster covered by a federal disaster declaration has satisfied the work search requirements under subsection (b) for any given week in the benefit period unless the Department of Commerce, Division of Employment Security, requires the individual to conduct a work search.
Part II: Paid Time Off Excluded From Severance Pay
Amends GS 96-15.01, which sets out provisions for establishing a benefit year for the administration of unemployment benefits.
Amends subsection (c) by establishing that an individual is not unemployed during a calendar week if the individual receives or will receive remuneration in any form as a result of the individual’s separation from work (previously, forms of remuneration were specified as wages in lieu of notice, accrued vacation pay, terminal leave pay, severance pay, separation pay, and dismissal payments or wages by whatever name). Additionally, establishes that any amount paid to an individual for paid time off that was available but unused before the individual’s separation under a written policy in effect before the separation are not remuneration as a result of separation under the statute. Effective July 1, 2017, and applies to claims for benefits filed on or after that date.
Part III: Miscellaneous Changes
GS 96-9.7(a) imposes a surtax on an employer who is required to make a contribution to the Unemployment Insurance Fund equal to 20% of the contribution due under GS 96-9.2. Amends GS 96-9.7(b) to provide that the surtax under subsection (a) does not apply in a calendar year if, as of September 1 of the preceding calendar year (previously, as of the preceding August 1 computation date), the amount in the State’s account in the Unemployment Trust Fund equals or exceeds $1 billion.
Amends 96-15(b)(2), which provides for adjudication when (1) a protest is made by a claimant to the initial or monetary determination or (2) a question or issue is raised as to the claimant’s eligibility, whether any disqualification should be imposed, or benefits denied or adjusted. Reduces the required time period for which any interested employer must be allowed to file its protest of the claim in order to have the claim referred to an adjudicator from 14 days from the mailing or delivery of the notice of the filing of the claim against the employer’s account to 10 days. Makes conforming changes.
Effective July 1, 2017, and applies to claims for benefits filed on or after that date, and applies to tax calculations on or after that date.
Part IV: Federal Conforming Changes
Makes the following changes to GS 96-11.7, concerning the transfer of an employer’s unemployment insurance account due to the acquisition of a business.
Changes the title of the statute and descriptors of the subsections of the statute.
Provides in subsection (a) (Acquisition of a Business, previously Mandatory Transfer) that when an employer acquires all of the business (was, organization, trade, or business) of another employer, the account of the predecessor must be transferred as of the date of the acquisition to the successor for use in the determination of the successor’s contribution rate. Removes the provision that provided for the successor’s contribution rate to be determined without regard to the predecessor’s contribution rate when there is no common ownership between the predecessor and the successor and the successor acquired the assets in a sale in bankruptcy.
Provides in subsection (b) (Acquisition of a Portion of a Business, previously Consent) that when a distinct and severable portion of an employer’s business (was, organization, trade, or business) is transferred to a successor employer and the successor employer continues to operate the acquired business, the portion of the account attributable to the transferred business, with the approval of the Department of Commerce, Division of Employment Security (Division), may be transferred by mutual consent to the successor employer as of the date of the transfer. Previously, subsection (b) did not provide that the transfer of the related account be as of the date of the transfer. Sets out that the successor employer requesting the transfer may make a request for transfer by filing an application for transfer with the Division of Employment Security within two years after the date the business was transferred (previously provided another option to file an application within two years of notification by the Division of the right to request an account transfer). Makes conforming changes to eliminate distinctions between applications approved and filed within 60 days of notification by the Division and the effective date of transfer of the account.
Provides in subsection (c) (Acquisition by Related Party, previously Continuty of Control) that if an employer transfers all or part of its business to another person and, at the time of the transfer, there is substantially common ownership, management, or control of the predecessor employer and the transferee, then it is mandatory that the portion of the account attributable to the transferred business be transferred to the transferee as of the date of the transfer. Previously, subsection (c) required the Division of Employment Security to assign any new employer with continuity of control to the employer account of the existing business enterprise. Makes conforming changes to replace "continuity of control" language throughout the subsection with "substantially common ownership, management or control." Sets out that substantially common ownership, management, or control exists if one or more persons, entities, or other organizations owning, managing, or controlling the business remain in ownership, management, or control of the transferee. Makes additional conforming changes.
Adds new subsection (c1) to bar the Division of Employment Security from transferring the account of the predecessor employer if the Division finds that a person acquired the business solely or primarily for the purpose of obtaining a lower contribution rate.
Replaces the existing language of subsection (d), which sets out the provisions for determining an employer’s contribution rate relating to account transfers. Provides instead that, if the effective date of a transfer of an account under the statute is after the computation date in a calendar year, the Division of Employment Security must recalculate the contribution rate for the transferring employer and the transferee based on their account balances on the effective date of the account transfer.
Adds new subsection (g) to set out provisions similar to the existing language of subsection (c) that was replaced by the act above. Provides that any transferee with substantially common ownership, management, or control of an existing business cannot request or maintain an account with the Division other than the account of the existing business, and that the Division is required to recalculate the annual tax rates based on the combined annual account balances of the new employer and the existing business if the Division finds a transferee received a new account and the new employer has substantially common ownership, management, or control with an existing business.
Makes technical changes. Effective July 1, 2017.
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