Unemployment benefits offer a financial lifeline to workers who lose their jobs through no fault of their own. In North Carolina, that requirement is interpreted as excluding those fired because of their own conduct.
Anyone considering applying for unemployment benefit payments in North Carolina will want to get an overview of the eligibility requirements. In North Carolina, if an employer claims that a person was fired for cause, they must present evidence that this was the case. A worker may win the right to benefits if they present compelling evidence that they were fired for some other reason.
Overview of North Carolina Unemployment
As the name indicates, unemployment insurance (UI) is an insurance program, and just as with auto insurance, only those who pay for benefits are eligible to profit from it. When it comes to unemployment insurance, payment is mandatory.
Both federal and state laws require that employers sign up for unemployment protection for their qualifying employees. Benefits are paid from the North Carolina’s Unemployment Insurance Fund, which is financed by the payroll taxes paid by employers and employee contributions.
During the COVID pandemic, the procedures in many states were simplified to facilitate getting aid to affected individuals. After the federal program ended in 2021, North Carolina returned to the eligibility requirement laws that were in effect pre-pandemic. North Carolina unemployment benefits are intended to assist a qualified worker who has lost their job and paycheck.
Criteria for Unemployment Compensation
Is every unemployed North Carolina worker eligible for UI benefits? No. There are several criteria that an employee must meet to qualify for unemployment benefits in North Carolina. They must:
- Be unemployed through no fault of their own.
- Have earned enough wages during a base period from an employer who paid the unemployment tax.
- Be available to work and physically able to work.
- Be actively seeking work.
Unemployment Claims and Employee Fault
Civil rights laws prohibit firing an employee because of their race, skin color, sex and national origin, among other protected classifications. That means that an employee cannot be fired in North Carolina for any of these factors. But otherwise, employers have broad rights to end an employment contract.
In fact, in the states, all employment is considered "at-will" unless the contract provides differently. That means that the employer is permitted to fire an employee for any reason other than those expressly excluded by law.
When an employee is fired for their behavior on the job, it is called being fired for fault. For example, being fired for poor job performance, stealing materials, habitual lateness or violating company polices are all reasons for being fired for cause. This disqualifies the employee from receiving unemployment benefits.
When a Worker Quits
What if a worker voluntarily quits? Generally, quitting employment is viewed as making the worker ineligible for unemployment payments. However, if quitting was due to certain reasons, such as the employer violating laws or forcing the worker into dangerous conditions, quitting might not disqualify the worker from UI benefits.
Advising the State About Reasons for Unemployment
When someone applies for North Carolina unemployment benefits, they must advise the state Employment Security Commission why they are unemployed. The next step is to contact the person's former employer to verify the reason. If the employee was fired for fault, the employer will relay this information.
Their payroll tax rate depends in part on how many of its former employees collected unemployment benefits, so the employer has no reason to allow unqualified claimants to collect benefits.
Evidence to Substantiate a Claim
The Employment Security Commission asks for evidence substantiating this claim. If the employer produces evidence that the employee was fired for bad behavior or some other reason related to job performance, the employee is given a chance to dispute it by:
- Submitting relevant documents.
- Submitting job performance records showing that they were good workers.
- Presenting supervisors or colleagues as witnesses.
The commission makes a final ruling on the matter. If they determine that the employee was fired for fault, they will not eligible for unemployment insurance benefits.
Meeting Threshold Earnings Requirements
Only workers who are out of a job through no fault of their own are eligible for North Carolina UI benefits. This is a condition for unemployment eligibility in most states. However, North Carolina claimants must meet other qualifications as well, including having earned a specified minimum of wages during the claimant's base period.
The base period in North Carolina is the first four of the last five completed calendar quarters before the claim is filed. A quarter is a three-month period, either January through March, April through June, July through September, or October through December.
In order to qualify for the minimum weekly unemployment benefit in the state, the claimant must have earned wages in at least two quarters of their base period. Also, they must have received wages of at least six times the average weekly insured wage during the base period.
Weekly Benefit Amounts
Note that the more the claimant has earned, the more they will be eligible to receive in weekly benefits. In North Carolina, the minimum weekly benefit amount is $15.00. The state's Employment Security code sets the maximum weekly benefit amount at $350.00.
An individual can get between 12 and 20 weeks of regular unemployment benefits in North Carolina, the number depending on the seasonally adjusted statewide unemployment rate.
Enrolled NC Employers
North Carolina UI benefits are paid for by a payroll tax imposed on employers. The core rules are:
- If, during a calendar year, the employer had at least one worker employed during 20 calendar weeks, they must enroll in the unemployment insurance and are subject to the tax.
- Likewise, a North Carolina employer must pay to the state UI taxes if they paid wages of at least $1,500 in any calendar quarter.
- The state has different rules for when employers of agricultural workers, domestic employees and some nonprofit workers are liable for the payroll tax.
Small businesses with a part-time or temporary employee may not be required to pay this tax, and their employees will not be eligible for UI benefits. The only workers who can claim UI benefits are those who have been employed during the base period by a North Carolina employer who pays the state UI taxes.
What About the Federal Benefits Program?
Unemployment insurance is largely a creature of state law and left to each state to organize. States generally describe UI eligibility for workers within their jurisdiction and set the benefit amounts. However, the federal government occasionally steps in to supplement the state program.
Most recently, this occurred in 2020. When the COVID-19 pandemic hit the nation, many businesses closed and many nonessential workers became unemployed.
The CARES Act
How did this happen? Once the World Health Organization declared COVID to be a pandemic, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The purpose of this act was to help workers who had lost their employment (and their income) as a result of the coronavirus pandemic.
The CARES Act provided for expanded UI eligibility. It also included supplemental unemployment benefit, adding funds to which unemployed workers were entitled.
This federal legislation that defined "pandemic UI benefits" also changed state eligibility laws. That is, it modified the reasons a worker could quit work without becoming ineligible for UI. It added many coronavirus-related reasons to the list, from having to stay home because they have the virus to staying at home to care for kids when schools are closed due to COVID-19.
Pandemic Programs Ended in 2021
The initial CARES Act was passed in March 2020, and carried a supplemental payment provision giving $600 per week to unemployed persons in federal Pandemic Emergency Unemployment Compensation (PEUC) benefits.
The CARES Act also added up to 13 weeks of supplemental unemployment benefits and extended UI eligibility for self-employed and gig workers under a program called Pandemic Unemployment Assistance (PUA). These programs ended in September 2021, and the state programs, including the program in North Carolina, reverted to their prior configurations.
Actively Seeking Work Requirements
Finally, an out-of-work employee is not permitted to sit back and take it easy while collecting unemployment benefits in North Carolina. That is why the state imposes a requirement that even if the worker is out of work through no fault of their own, they cannot get state unemployment benefits unless they are actively seeking new employment.
They must be available to work and actively seeking work. Any unemployed worker who is not available to accept new work or is not seeking a job will not get UI benefits.
Relaxed Work Search Requirements During the Pandemic
Federal pandemic legislation had modified the North Carolina laws, as well of those of other states, changing the requirement that unemployed workers be available to work for UI benefits.
Under the CARES Act, a worker was not required to seek work if they actually came down with COVID-19, were taking care of someone who had COVID-19, or had the responsibility for minor children during the day because their schools were closed because of COVID-19.
Weekly Certification Required
North Carolina requires that everyone collecting UI benefits must be registered for work on the NC Works website. They must also make three valid job contacts with potential employers for each week they claim for unemployment insurance benefits. They must fill in form NCUI 506, detailing their work contacts.
Unemployment Applications in North Carolina
The state provides an online system for claimants to can to apply for UI benefits in. It is easy to follow the online process. Applicants without access to a computer can call the office to apply at 888-737-0259.
Applying online starts at the state Department of Employment Security website. The first step is to create an individual account. To do that:
- Click on "Create an Online Account" on the DES homepage.
- Enter a Social Security number, then enter it again.
- Create a user name to use at each sign in.
- Enter an email address, then enter it again.
- Create a PIN number.
- Enter a contact phone number.
- Create a password at least eight characters long that includes at least one uppercase letter, one lowercase letter, one digit, and one special character.
- Select "Create Account."
- Find the email sent to the email address provided during account creation.
- Activate the account by selecting the activation link in that email.
Creating a New Claim Online
To create a claim, the individual must sign onto the UI website and add their personal information to complete the online claimant registration.
They must select the "File a New Unemployment Insurance Claim" link on the Customer Menu and respond to all questions about their employment history. At the "Apply for Benefits" area, the claimant should enter information about their latest employer.
When the information is complete, the application is ready to submit. The claimant must complete the Acknowledgement section, then select "Submit."
- Justia: 2021 North Carolina General Statutes Chapter 96 - Employment Security
- North Carolina Department of Commerce: Unemployment Insurance FAQs
- North Carolina Department of Commerce: Unemployment Insurance Before You Apply
- North Carolina Employment Security Commission:NCUI 506
- North Carolina Department of Commerce: Filing Your Unemployment Application
- Investopedia: Coronavirus Aid, Relief, and Economic Security (CARES) Act
- North Carolina: Find a Job
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.