WINSTON-SALEM, North Carolina (Reuters) - North Carolina Governor Pat McCrory on Tuesday signed into law a measure that will cut benefits for jobless workers by about one-third and reduce how long they can collect any aid in a state with the fifth-highest unemployment rate in the country.
The Republican governor said the legislation, the second bill he has signed since taking office at the start of the year, marked an important step toward fixing the state's unemployment insurance system.
The overhaul will allow North Carolina to repay $2.5 billion borrowed from the federal government for unemployment benefits at a quicker pace.
The law, which takes effect on July 1, cuts maximum weekly benefits to $350 from $535 and caps benefits at 12 to 20 weeks, depending on the unemployment rate, instead of the current 26 weeks.
McCrory said the measure "will protect our small businesses from continued over-taxation, ensure our citizens' unemployment safety net is secure and financially sound for future generations, and help provide an economic climate that allows job creators to start hiring again."
Critics said the harsh nature of the cuts would harm some of the state's most vulnerable residents. North Carolina has more than 400,000 jobless workers, making its 9.2 percent unemployment rate higher than the national average of 7.9 percent, according to the U.S. Bureau of Labor Statistics.
"Hundreds of thousands of jobless workers thrown out of work through no fault of their own will face deepening poverty as a result of this decision," the North Carolina Justice Center, a social justice advocacy group, said in a statement after the bill signing on Tuesday.
"North Carolina's legislature and governor chose to permanently cut benefits, reduce employers' contributions over time, and reject $700 million in federal extended benefits," the center said.
About 170,000 long-term unemployed workers in North Carolina will lose out on extra federal funds under the new law, according to the U.S. Department of Labor.
(Reporting by Colleen Jenkins; editing by Kevin Gray and Matthew Lewis)