North Carolina’s unemployment rate recently reached 7.9%, its highest level in 25 years. The U.S. Bureaus of Labor Statistics reports that for November 2008, North Carolina recorded the second largest month over month employment loss in the country, with 46,000 jobs lost and the highest month over month job loss on a percentage basis, 1.1%. Many of the unemployed are seeking benefits from the North Carolina Employment Security Commission (ESC) while they look for work.

The current high rate of unemployment has triggered the provisions of North Carolina General Statute § 96-12.01, which allows unemployed workers to seek extended employment benefits in periods of high unemployment. Normally, unemployed workers may obtain a maximum of 26 weeks of unemployment benefits. The extended benefit provisions allow eligible unemployed workers to get up to an additional 13 weeks of benefits. If unemployment continues to rise and exceeds 8%, and certain other conditions are met, extended benefits would be available for up to 20 additional weeks, rather than the current 13 additional weeks.

The extended benefits currently available may become important to you if you lay off or terminate an employee. When a former worker applies for unemployment benefits, the ESC makes an initial determination about whether the benefits should be charged to the employer’s unemployment insurance account. Charging an employer’s account may require the employer to pay higher unemployment insurance payments in the future. If the ESC initially determines that the employer’s account should be charged, the employer may appeal this determination and will have a right to be heard at either a telephone or in-person appeals hearing.

In addition to charging normal unemployment benefits, up to 50% of the extended benefit amount paid to a former employee may be charged to an employer’s unemployment insurance account.

Because of the additional benefits available to former employees, employers may want to be more aggressive in contesting initial decisions that award benefits, because the extended unemployment benefit provisions could cause greater than normal charging of an employer’s unemployment insurance account. There are many circumstances in which a former employee’s benefits should not be charged to an employer’s account. For example, if an employee is discharged for misconduct or resigns for medical reasons, an employer may be able to avoid having some or all of the benefits charged to its account. Although the Employment Security Commission appeals process is time consuming, a successful appeal will prevent unnecessary increases in an employer’s unemployment insurance costs.