The state Senate gave preliminary approval to the proposal Tuesday and Gov. Pat McCrory, a Republican, promised to sign it into law, The Washington Post reported.
The measure would reduce the maximum number of week a person could receive state jobless benefits from 26 weeks to 20 weeks and reduce the maximum weekly benefit from $535 to $350. The new law also would require about 30,000 businesses to pay unemployment insurance taxes they don't currently pay.
In North Carolina, the unemployment rate is 9.2 percent, among the nation's highest .
The reductions could have fallout for the state's unemployed, the Post said. If they don't collect at least 26 weeks of unemployment checks from the state, they are disqualified from getting jobless benefits from the federal government, which adds up to an additional 47 weeks.
An estimated 170,000 people would be ineligible for federal jobless benefits in the state, the U.S. Labor Department said.
"This cutoff is automatic under federal law. I have no discretion to stop it," acting Secretary of Labor Seth D. Harris said.
Supporters said North Carolina has few options after falling into debt to finance the benefits, the Post said. Seven other states have also cut jobless benefits in the wake of the recession.
But critics said the unemployed in North Carolina take a double hit, the Post said.
"Unemployed job-seekers are facing a one-two punch, with state cuts triggering federal cuts too -- a real double-whammy hitting families whose needs remain great," said Christine Owens, executive director of the National Employment Law Project.