North Carolina Unemployment Compensation laws & HR compliance analysis

North Carolina Unemployment Compensation: What you need to know

Virtually all employers are covered by North Carolina’s Employment Security Law and are therefore subject to the state unemployment insurance tax (NC Gen. Stat. Sec. 96-1 et seq.).
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The law excludes certain services from coverage, including, for example, services provided by:
• Independent contractors;
• Certain employees of governmental entities or nonprofit organizations; and
• Certain real estate brokers and securities salespersons (NC Gen. Stat. Sec. 96-1).
Taxable wage base. The Division of Employment Security must determine the taxable wages for each calendar year (NC Gen. Stat. Sec. 96-9.3).
Rates. To find the current tax rate, visit https://desncc.com/deshome. New employers pay a certain set percentage.
Experience ratings. After a new employer period, an employer receives an “experience rating” that determines its tax rate for the coming year. The rating is calculated on the basis of the total amount of taxes paid in, the total amount of benefits paid out, and the size of the taxable payroll. A relatively low volume of unemployment claims yields a lower tax rate.
Base-period employment. Benefits paid are charged to the accounts of those that employed the claimant during the “base period,” which consists of the first 4 of the 5 calendar quarters immediately preceding the claim (NC Gen. Stat. Sec. 96-1).
Alternate base period. An individual who cannot establish a claim based on the normal base period will be moved automatically to an alternate base period consisting of the last 4 completed calendar quarters before the quarter in which the claim was filed (NC Gen. Stat. Sec. 96-14.1).
Employee contributions. ...

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