The Employment Security Commission said today that it expects by Friday to have returned nearly all the deductions it made from longtime unemployed workers benefit checks.
Spokesman Larry Parker said the agency began refunding the money late last week.
The payments are being deposited into people's accounts as individual payments, he said.
Last month, the ESC faced a firestorm of criticism after it began recouping $28 million in overpayments the agency mistakenly made to about 38,000 unemployed workers.
The ESC earlier estimated that about $4 million to $5 million was deducted from unemployed workers checks before the deductions were halted at the request of Gov. Bev Perdue.
Parker said the state is still working with the U.S. Department of Labor to figure out who will cover the $28 million in overpayments.
The agency has said the overpayments, made between Jan. 1 and May 16 of this year, were caused by an administrative error that it has known about since January.
The ESC delayed fixing a computer glitch because its workers were focused on implementing other benefit programs that affected more people.
All of those affected had been receiving unemployed benefits for more than a year.