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North Carolina legislature votes to prevent tax hike on employers

Raleigh, NC – Today, the state legislature gave final approval to Senate Bill 311, which prevents an unemployment insurance tax rate hike on employers.


Unemployment assistance is funded by a tax rate on employers that is based on an automatic formula tied to the balance of money in the unemployment insurance trust fund.


Without legislative action, the tax rate would increase automatically in 2022 to 2.4%.

“This legislation keeps the unemployment insurance rate from rising,” said Representative Allen McNeill (R-Randolph) on the House floor during the bill’s debate. “It will save employers in our state a lot of money, and there is no need for it to rise.”

While the trust fund has a comfortable balance of $2.9 billion, it is less than what has been in the account in years past because more citizens were receiving unemployment benefits due to the pandemic.


The legislation freezes the rate at 1.9% instead of a 2.4% increase based on the automatic formula.


Employers have suffered tremendously over the past two years due to the pandemic and shutdown orders. With many businesses still facing a long recovery, including an inability to find and hire workers, a higher tax rate for unemployment would be an unnecessary and unfair burden and setback.


Senate Bill 311 passed the legislature with unanimous support. It now heads to the Governor for his signature.

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