COVID-19 Support Payment Guidance
On April 20, 2020, Governor Roy Cooper issued Executive Order No. 134. This order recognizes that COVID-19 has caused and will continue to cause substantial economic disruption in North Carolina, including disruption to employees and employers. As a result, businesses in North Carolina have been compelled to place their employees on furlough (i.e., a temporary period of time during which an employee performs no personal services for the employer as a result of a layoff caused by the economic impacts of COVID-19).
Despite these challenges, some employers have indicated a desire to offset the financial impacts of such furloughs by making voluntary COVID-19-related support payments (“COVID-19 Support Payments”) to employees who may also receive unemployment insurance (UI) benefits. The Governor’s Executive Order clears the way for employers – who choose to take advantage of this voluntary option – to make these COVID-19 Support Payments without such payments impairing their employees’ UI benefits.
Employers that are considering issuing COVID-19 Support Payments in response to Executive Order No. 134 must take the following actions before making any payments:
- Submit an employer-filed unemployment insurance claim (attached claim) for each employee who may receive COVID-19 Support Payments. You can find the procedure for filing an attached claim on behalf of your employees on the DES website at des.nc.gov under COVID-19 Information for Employers.
- Submit a written plan to DES by completing the form found here and submitting the completed form electronically to email@example.com.
In this plan, employers will certify that the payments are made under certain conditions to ensure that the payments do not constitute “wages,” as that term is defined under North Carolina law. These conditions are that:
- The payment must be made voluntarily in response to furloughing the employee;
- The payment must be for services rendered by the employee in the past;
- The employee (or the employee’s estate) must not be obligated to repay the payment under any circumstances; and
- The payment must not obligate the employee to perform or not perform any act in connection with the individual’s status as an employee.
Employers do not need to wait on specific approval from DES in order to proceed with making COVID-19 Support Payments. However, please understand that payments made without filing attached claims for employees who may receive COVID-19 Support Payments or not completing the necessary certifications may affect your employees’ eligibility for UI benefits.