RALEIGH, (SGRToday.com) - The U.S. Department of Labor (USDOL) has approved North Carolina's application for a waiver of additional Federal Unemployment Tax Act (FUTA) penalties. State officials say the agreement will save North Carolina employers approximately $180 million for tax year 2014.

Employers have been paying a penalty per employee due to the state's high unemployment debt -- money the state borrowed from the federal government to pay unemployment benefits. The debt began at $2.8 billion in 2012 and has been paid down to a current $465 million.
 
“Restructuring North Carolina’s unemployment insurance system and aligning it with those of our neighboring states has set our unemployment program on a path to sustainability,” Gov. Pat McCrory said in a statement. “By demonstrating to the federal government that we have cut up the federal unemployment insurance credit card, North Carolina employers will avoid paying penalties and be able to invest those funds in job creation.”
 
Governor McCrory applied for a waiver of additional debt penalties and USDOL has granted the request after North Carolina worked hard to reduce the $2.5 billion debt and set in place a foundation for sustainable funding by the state’s employers.
 
“This is great news for the employers of North Carolina,” said Division of Employment Security Assistant Secretary Dale Folwell in the statement. “This waiver of the penalty is a direct result of the policies, processes and people who have helped pay down the unemployment debt owed to the federal government.”
 
“It is our goal to pay off this debt in 2015,” Folwell said.  “Once the debt is paid off, employers will begin receiving their full Federal Unemployment Tax Act (FUTA) credit.  This will be a tremendous burden lifted from the employers of this state.  It will give them certainty about the cost of doing business in North Carolina.  It will also encourage new businesses to come to this state, driving unemployment even lower.”