Balancing the economic demands of the unemployed with the associated costs is a tricky proposition for states. As seen following the Great Recession, a high number of claims can plunge a state into debt and increase taxes for local employers.

One solution – albeit a fairly uncommon one – is to drastically reduce the number of weeks a person is eligible for benefits. Recently, the lowest total belonged to North Carolina, with a maximum of 14 weeks, while the majority of states were often up near 26 weeks. However, according to the North Carolina-based Winston-Salem Journal, North Carolina isn’t the lowest anymore.

That distinction now belongs to Florida. In early 2015, the Sunshine State dropped its maximum from 16 weeks of benefits to only 14 weeks, the news source reported. North Carolina, on the other hand, went up from 14 to 15 weeks. Fewer weeks of eligibility can mean that states will have to spend less per claimant. Naturally, that has a trickle-down effect to the employers who support the system via unemployment insurance taxes.

Are fewer weeks a smart choice for Florida?
While the change is relatively new for Florida, the positive effects have been felt in North Carolina. Back in the summer of 2014, the state’s Division of Employment Security announced that it had reduced its unemployment insurance debt from $2.6 billion to only $980 million. This has opened the door for paying off that debt as early as August 2015.

“The quicker this debt is paid off, the quicker we can lower the taxes and level the playing field for North Carolina employers,” North Carolina Department of Commerce assistant secretary of employment security Dale Folwell said at the time.

“Will North Carolina’s UI success repeat itself in Florida?”

Changing its weekly eligibility rules wasn’t the only alteration to unemployment insurance in North Carolina. In December, the DES reported that it had received more than $1 million in UI payments thanks to accepting credit cards. Over the past year, the state has let those in debt to the DES settle via credit. That has not only saved money on postage fees, but expedited the process as well.

While it is too early to tell if Florida has made the right call by reducing the number of eligible weeks, the positive momentum gained by North Carolina following a similar move can be considered a good sign.

At Corporate Cost Control, we work closely with employers across the country to better manage the nuances of unemployment insurance. Legislation changes on the state level could impact you today, and we welcome any questions or concerns you may have on a wide range of topics.


Contact CCC to see how we can save your organization time and money.
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