GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H D
HOUSE BILL DRH40426-MC-187
Short Title: Working Families Act. (Public)
Sponsors: Representative Pittman.
Referred to:
*DRH40426 -MC-187*
A BILL TO BE ENTITLED 1
AN ACT REDUCING PARENT COPAYMENTS FOR SUBSIDIZED CHILD CARE, 2
REENACTING THE CHILD TAX CREDIT, RAISING THE STATE MINIMUM WAGE 3
IN PHASES UP TO FIFTEEN DOLLARS PER HOUR , ALLOWING A HIGHER LOCAL 4
MINIMUM WAGE, INCREASING THE INCOME ELIGIBILITY LIMIT FOR THE 5
PROPERTY TAX HOMESTEAD CIRCUIT BREAKER, CREATING A HOMEBUYERS ' 6
ASSISTANCE PROGRAM WITH THE NORTH CAROLINA HOUSING FINANCE 7
AGENCY FOR FIRST-TIME HOMEBUYERS WHO WORK AS PUBLIC SERVANTS, 8
AND ENACTING THE NORTH CAROLINA PAID FAMILY LEAVE INSURANCE ACT 9
TO HELP WORKING FAMILIES AND CREATING THE EMPLOYER GRANT FUND 10
TO OFFSET COSTS INCURRED BY EMPLOYERS AND APPROPRIATING FUNDS 11
FOR THAT PURPOSE. 12
The General Assembly of North Carolina enacts: 13
14
CHILD CARE SUBSIDIES 15
SECTION 1.1.(a) Section 9D.3(b) of S.L. 2023-134 reads as rewritten: 16
"SECTION 9D.3.(b) Fees for families who are required to share in the cost of care are 17
established based on ten percent (10%) seven percent (7%) of gross family income. When care 18
is received at the blended rate, the copayment shall be eighty-three percent (83%) of the full-time 19
copayment. Copayments for part-time care shall be seventy-five percent (75%) of the full-time 20
copayment." 21
SECTION 1.1.(b) This section becomes effective July 1, 2025. 22
23
REENACT CHILD TAX CREDIT 24
SECTION 2.1.(a) G.S. 105-153.10 is reenacted as it existed immediately before its 25
expiration and reads as rewritten: 26
"§ 105-153.10. Credit for children. 27
(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 28
Code for the taxable year is allowed a credit against the tax imposed by this Part for each 29
dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 30
credit against the tax imposed by this Part for each qualifying child of the taxpayer. A "qualifying 31
child" is defined by section 152(c) of the Code. The amount of credit allowed under this section 32
for the taxable year is equal to the amount listed in the table below based on the taxpayer's 33
adjusted gross income, as calculated under the Code: 34
Filing Status AGI Credit Amount 35
Married, filing jointly Up to $40,000 $125.00$250.00 36
H.B. 786
Apr 3, 2025
HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
Page 2 DRH40426-MC-187
Over $40,000 1
Up to $100,000 $100.00$125.00 2
Over $100,000 0 3
4
Head of Household Up to $32,000 $125.00$250.00 5
Over $32,000 6
Up to $80,000 $100.00$125.00 7
Over $80,000 0 8
9
Single Up to $20,000 $125.00$250.00 10
Over $20,000 11
Up to $50,000 $100.00$125.00 12
Over $50,000 0 13
14
Married, filing separately Up to $20,000 $125.00$250.00 15
Over $20,000 16
Up to $50,000 $100.00$125.00 17
Over $50,000 0. 18
19
(b) Limitations. – A nonresident or part-year resident who claims the credit allowed by 20
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 21
G.S. 105-134.5(b) or (c), as appropriate.The credit allowed under this section may not exceed the 22
amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, 23
except payments of tax made by or on behalf of the taxpayer.G.S. 105-153.4. Married individuals 24
qualifying for a credit under this section who file separate returns may not collectively claim 25
more than the maximum credit allowed under a joint return. 26
(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 27
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 28
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 29
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In 30
computing the amount of tax against which multiple credits are allowed, nonrefundable credits 31
are subtracted before refundable credits." 32
SECTION 2.1.(b) This section is effective for taxable years beginning on or after 33
January 1, 2025. 34
35
INCREASE STATEWIDE MINIMUM WAGE AND ALLOW HIGHER LOCAL 36
MINIMUM WAGE 37
SECTION 3.1. G.S. 95-25.3 reads as rewritten: 38
"§ 95-25.3. Minimum wage. 39
(a) Every employer shall pay to each employee who in any workweek performs any work, 40
wages of at least six dollars and fifteen cents ($6.15) per hour or the minimum wage the amount 41
set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 206(a)(1), as 42
that wage may change from time to time, whichever is higher, except as otherwise provided in 43
this section.or the amount set forth below in this subsection, whichever is higher: 44
(1) Effective January 1, 2026, wages of at least ten dollars ($10.00) per hour. 45
(2) Effective January 1, 2027, wages of at least twelve dollars ($12.00) per hour. 46
(3) Effective January 1, 2028, wages of at least thirteen dollars ($13.00) per hour. 47
(4) Effective January 1, 2029, wages of at least fourteen dollars ($14.00) per hour. 48
(5) Effective January 1, 2030, wages of at least fifteen dollars ($15.00) per hour. 49
(6) Effective January 1, 2031, and annually thereafter, the amount determined by 50
the Commissioner of Labor under subsection (a1) of this section. 51 General Assembly Of North Carolina Session 2025
DRH40426-MC-187 Page 3
(a1) Beginning September 30, 2030, and on each September 30 thereafter, the 1
Commissioner of Labor shall calculate an adjusted minimum wage rate indexed to the percentage 2
increase in the Consumer Price Index (All 29 Urban Consumers, U.S. City Average for All 3
Items), CPI-I, or its successor index, as calculated by the U.S. Department of Labor for the 4
12-month period preceding the previous September 1. Each adjusted minimum wage rate 5
calculated shall be published on September 30 and take effect on the following January 1. 6
…." 7
8
INCOME ELIGIBILITY/PROPERTY TAX HOMESTEAD CIRCUIT BREAKER 9
SECTION 4.1.(a) G.S. 105-277.1B reads as rewritten: 10
"§ 105-277.1B. Property tax homestead circuit breaker. 11
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 12
is designated a special class of property under Article V, Section 2(2) of the North Carolina 13
Constitution and is taxable in accordance with this section. 14
… 15
(f) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 16
of tax that is imposed for the current tax year on his or her permanent residence and exceeds the 17
percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 18
residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 19
limit imposed by this section, then both the taxes due under this section and the taxes deferred 20
under this section must be apportioned among the taxing units based upon the ratio each taxing 21
unit's tax rate bears to the total tax rate of all units. 22
Income Over Income Up To Percentage 23
-0- Income Eligibility Limit 4.0% 24
Income Eligibility Limit 150% 180% of Income Eligibility Limit 5.0% 25
…." 26
SECTION 4.1.(b) This section is effective for taxes imposed for taxable years 27
beginning on or after July 1, 2025. 28
29
HOMEBUYERS ' ASSISTANCE PROGRAM 30
SECTION 5.1.(a) As used in this section, the following definitions apply: 31
(1) Active duty member. – As defined in G.S. 58-58-335(1). 32
(2) Emergency medical services personnel. – As defined in G.S. 131E-155(7). 33
(3) Firefighter. – As defined in G.S. 58-84-5(3a). 34
(4) First-time homebuyer. – An individual who meets all of the following criteria: 35
a. Is purchasing the subject residential property. 36
b. Will reside in the subject residential property as a principal residence. 37
c. Has had no ownership interest, sole or joint, in a residential property 38
during the three-year period preceding the date of the purchase of the 39
subject residential property. 40
(5) Law enforcement officer. – An individual employed by the State or a local 41
government in this State as a sheriff, deputy sheriff, police officer, or member 42
of the State highway patrol. 43
(6) Public servant. – An active duty member or veteran, or a law enforcement 44
officer, teacher, firefighter, or emergency medical services personnel 45
employed in this State. 46
(7) Teacher. – An individual whose major responsibility is to either teach or 47
directly supervise teaching, as classified by the State Board of Education, in a 48
public school unit, as that term is defined in G.S. 115C-5(7a). 49
(8) Veteran. – As defined in G.S. 122C-465(3). 50 General Assembly Of North Carolina Session 2025
Page 4 DRH40426-MC-187
SECTION 5.1.(b) The Housing Finance Agency (Agency) shall establish a program 1
operating under the Homeownership Assistance Fund, authorized under G.S. 122A-5.7, that 2
provides assistance to first-time homebuyers that are employed full time as public servants in this 3
State. The Agency shall provide, in the form of reimbursement or direct payment, monies to be 4
used for down payment assistance and to offset mortgage insurance premiums charged to 5
program participants. First-time homebuyers shall be limited to the lesser of the sum of 6
twenty-five thousand dollars ($25,000) or ten percent (10%) of the purchase price for down 7
payment assistance, mortgage insurance premium assistance, and closing costs. The Agency may 8
provide for mortgage insurance payment assistance at least monthly but for no longer than 60 9
months for any single first-time homebuyer. 10
SECTION 5.1.(c) The Agency is hereby empowered to adopt, modify, or repeal 11
rules and regulations governing the provision of down payment assistance and mortgage 12
insurance assistance provided pursuant to this section. 13
SECTION 5.1.(d) There is appropriated from the General Fund to the 14
Homeownership Assistance Fund, authorized under G.S. 122A-5.7, the sum of one hundred fifty 15
million dollars ($150,000,000) in recurring funds for the 2025-2026 fiscal year to be used for the 16
purposes provided in this act. 17
SECTION 5.1.(e) This section becomes effective July 1, 2025. 18
19
PAID FAMILY LEAVE INSURANCE 20
SECTION 6.1.(a) Effective January 1, 2026, the General Statutes are amended by 21
adding a new Chapter to read: 22
"Chapter 96A. 23
"Paid Family Leave Insurance Act. 24
"§ 96A-1. Short title; definitions. 25
(a) This Chapter shall be known and may be cited as the "North Carolina Paid Family 26
Leave Insurance Act." 27
(b) The following definitions apply in this Chapter: 28
(1) Application year. – The 12-month period beginning on the first day of the 29
calendar week in which an individual files an application for family and 30
medical leave insurance benefits. 31
(2) Assistant Secretary. – The Assistant Secretary of Commerce in charge of the 32
Division of Employment Security. 33
(3) Covered individual. – Any person who does all of the following: 34
a. Meets the monetary eligibility criteria set forth in G.S. 96-14.1(b) or 35
is self-employed, elects coverage, and meets the requirements of 36
G.S. 96A-13. 37
b. Meets the administrative requirements outlined in this Chapter and in 38
the rules adopted under this Chapter. 39
c. Submits an application. 40
(4) Covered service member. – Either: 41
a. A member of the Armed Forces, including a member of the National 42
Guard or Reserves, who is (i) undergoing medical treatment, 43
recuperation, or therapy, (ii) otherwise in outpatient status, or (iii) 44
otherwise on the temporary disability retired list for a serious injury or 45
illness that was incurred by the member in the line of duty on active 46
duty in the Armed Forces or a serious injury or illness that existed 47
before the beginning of the member's active duty and was aggravated 48
by service in the line of duty on active duty in the Armed Forces; or 49
b. A former member of the Armed Forces, including a former member of 50
the National Guard or Reserves, who is undergoing medical treatment, 51 General Assembly Of North Carolina Session 2025
DRH40426-MC-187 Page 5
recuperation, or therapy for a serious injury or illness that was incurred 1
by the member in the line of duty on active duty in the Armed Forces 2
or a serious injury or illness that existed before the beginning of the 3
member's active duty and was aggravated by service in the line of duty 4
on active duty in the Armed Forces and manifested before or after the 5
member was discharged or released from service. 6
(5) Division. – The Division of Employment Security of the Department of 7
Commerce. 8
(6) Employee. – Any individual employed by an employer. 9
(7) Employer. – Any person acting directly or indirectly in the interest of an 10
employer in relation to an employee. As used in this subdivision, "person" 11
means an individual, partnership, association, corporation, business trust, 12
legal representative, or any organized group of persons. For the purposes of 13
this Chapter, it also means the State of North Carolina, any city, town, county, 14
municipality, or any State or local agency or instrumentality of government. 15
The term does not include the government of the United States and any agency 16
of the United States (including the United States Postal Service and Postal 17
Rate Commission). 18
(8) Family and medical leave insurance benefits. – The benefits provided under 19
the terms of this Chapter. 20
(9) Family member. – Any of the following: 21
a. Regardless of age, a biological, adopted, or foster child, stepchild, or 22
legal ward, a child of a domestic partner, a child to whom the employee 23
stands in loco parentis, or a person to whom the employee stood in 24
loco parentis when the person was a minor. 25
b. A biological, adoptive, or foster parent, stepparent, or legal guardian 26
of an employee or an employee's spouse or domestic partner or a 27
person who stood in loco parentis when the employee or the 28
employee's spouse or domestic partner was a minor. 29
c. A person to whom the employee is legally married under the laws of 30
any state or a domestic partner of an employee as registered under the 31
laws of any state or political subdivision. 32
d. A grandparent, grandchild, or sibling (whether a biological, foster, 33
adoptive, or step relationship) of the employee or the employee's 34
spouse or domestic partner. 35
e. Any other individual related by blood or whose close association with 36
the employee is the equivalent of a family relationship. 37
(10) Health care provider. – Any person licensed under federal or North Carolina 38
law to provide medical or emergency services, including, but not limited to, 39
doctors, nurses and emergency room personnel, or certified midwives. 40
(11) Next of kin. – As defined in section 101(17) of the Family and Medical Leave 41
Act, 29 U.S.C. § 2611(17). 42
(12) Qualifying exigency leave. – Leave based on a need arising out of a covered 43
individual's family member's active duty service or notice of an impending 44
call or order to active duty in the Armed Forces, including, but not limited to, 45
providing for the care or other needs of the military member's child or other 46
family member, making financial or legal arrangements for the military 47
member, attending counseling, attending military events or ceremonies, 48
spending time with the military member during a rest and recuperation leave 49
or following return from deployment, or making arrangements following the 50
death of the military member. 51 General Assembly Of North Carolina Session 2025
Page 6 DRH40426-MC-187
(13) Retaliatory personnel action. – Denial of any right guaranteed under this 1
Chapter, including, but not limited to, any threat, discharge, suspension, 2
demotion, reduction of hours, any other adverse action against an employee 3
for the exercise of any right guaranteed herein, or reporting or threatening to 4
report an employee's suspected citizenship or immigration status or the 5
suspected citizenship or immigration status of a family member of the 6
employee to a federal, State, or local agency. Retaliatory personnel actions 7
shall also include interference with or punishment for in any manner 8
participating in or assisting an investigation, proceeding, or hearing under this 9
Chapter. 10
(14) Serious health condition. – An illness, injury, impairment, pregnancy, 11
recovery from childbirth, or physical or mental condition that involves 12
inpatient care in a hospital, hospice, or residential medical care facility, or 13
continuing treatment by a health care provider. 14
(15) State average weekly wage. – The average weekly insured wage as defined in 15
G.S. 96-1(b)(2). 16
"§ 96A-2. Eligibility for benefits. 17
Beginning January 1, 2026, family and medical leave insurance benefits are payable to an 18
individual who: 19
(1) Meets the definition of "covered individual" as defined by G.S. 96A-1(b)(3); 20
and 21
(2) Meets one of the following requirements: 22
a. Because of birth, adoption, or placement through foster care, is caring 23
for a new child during the first year after the birth, adoption, or 24
placement of that child; 25
b. Is caring for a family member with a serious health condition; 26
c. Has a serious health condition; 27
d. Is caring for a covered service member who is the covered individual's 28
next of kin or other family member; or 29
e. Because of any "qualifying exigency leave" arising out of the fact that 30
the family member of the covered individual is on active duty (or has 31
been notified of an impending call or order to active duty) in the 32
Armed Forces. 33
"§ 96A-3. Duration of benefits. 34
(a) The maximum number of weeks during which family and medical leave insurance 35
benefits are payable under G.S. 96A-2(2)c. in an application year is 18 weeks. 36
(b) The maximum number of weeks during which family and medical leave insurance 37
benefits are payable under G.S. 96A-2(2)a., (2)b., or (2)e. in an application year is 12 weeks. 38
(c) The maximum number of weeks during which family and medical leave insurance 39
benefits are payable under G.S. 96A-2(2)d. in an application year is 26 weeks. 40
(d) The first payment of benefits must be made to an individual within two weeks after 41
the claim is filed, and subsequent payments must be made every two weeks thereafter. 42
"§ 96A-4. Amount of benefits. 43
(a) The amount of family and medical leave insurance benefits shall be determined as 44
follows: 45
(1) The weekly benefit shall be determined as follows: (i) the portion of the 46
covered individual's average weekly wage that is equal to or less than one 47
hundred percent (100%) of the State average weekly wage shall be replaced 48
at a rate of ninety percent (90%) and (ii) the portion of an employee's or 49
self-employed individual's average weekly wage that is more than one 50 General Assembly Of North Carolina Session 2025
DRH40426-MC-187 Page 7
hundred percent (100%) of the State average weekly wage shall be replaced 1
at a rate of fifty percent (50%). 2
(2) The maximum benefit shall be one hundred percent (100%) of the statewide 3
average weekly wage. 4
(3) The minimum weekly benefit shall not be less than one hundred dollars 5
($100.00) per week except that if the covered individual's average weekly 6
wage is less than one hundred dollars ($100.00) per week, the weekly benefit 7
shall be the employee's full wage. 8
(4) For purposes of this section, a covered individual's average weekly wage shall 9
be the average weekly wage during the 12 months preceding submission of 10
the application (or the average weekly wage during the time the covered 11
individual worked, if it was less than 12 months). 12
(b) Family and medical leave insurance benefits are not payable for less than eight hours 13
of family and medical leave taken in one workweek. 14
"§ 96A-5. Contributions. 15
(a) Payroll contributions shall be authorized in order to finance the payment of benefits 16
under the family and medical leave insurance program. 17
(b) Beginning on January 1, 2026, for each employee, an employer shall remit to the Paid 18
Family and Medical Leave Fund (Fund), established under G.S. 96A-16, contributions in the 19
form and manner determined by the Division. Annually, not later than October 1, the Assistant 20
Secretary shall fix the contribution rate for the coming calendar year in the manner described in 21
this subsection. For calendar years 2026 and 2027, the Assistant Secretary shall do so based on 22
sound actuarial principles. For calendar year 2028 and thereafter, the Assistant Secretary shall 23
first certify and publish the following information: 24
(1) The total amount of family and medical leave insurance benefits paid by the 25
Division during the previous fiscal year; 26
(2) The total amount remaining in the Fund at the close of the fiscal year; 27
(3) The total amount equal to one hundred forty percent (140%) of the previous 28
fiscal year's expenditure for family and medical leave insurance benefits paid 29
and for the administration of the family and medical leave insurance program; 30
(4) The amount by which the total amount remaining in the Fund at the close of 31
the previous fiscal year is less than or greater than one hundred forty percent 32
(140%) of the previous fiscal year's expenditure for family and medical leave 33
insurance benefits paid and for the administration of the family and medical 34
leave insurance program; and 35
(5) The amount by which the contribution rate shall be adjusted to ensure that the 36
Fund shall maintain or achieve an annualized amount of not less than one 37
hundred forty percent (140%) of the previous fiscal year's expenditure for 38
family and medical leave insurance benefits paid and for the administration of 39
the family and medical leave insurance program. The contribution rate 40
adjustment, if any, made as the result of the Assistant Secretary's certification 41
and report under this subsection shall supersede the rate previously set forth 42
and shall become effective on January 1 of the following calendar year. 43
(c) A self-employed individual who is electing coverage under G.S. 96A-13 shall be 44
responsible for the employee's share of contributions set forth in subsection (b) of this section on 45
that individual's income from self-employment. 46
(d) An employer shall not deduct more than fifty percent (50%) of the contribution 47
required for an employee by subsection (b) of this section from that employee's wages and shall 48
remit the full contribution required under said subsection to the Fund. 49
"§ 96A-6. Reduced leave schedule. 50 General Assembly Of North Carolina Session 2025
Page 8 DRH40426-MC-187
(a) A covered individual shall be entitled, at the option of the covered individual, to take 1
paid family and medical leave on an intermittent or reduced leave schedule in which all of the 2
leave authorized under this Chapter is not taken sequentially. Family and medical leave insurance 3
benefits for intermittent or reduced leave schedules shall be prorated. 4
(b) The covered individual shall make a reasonable effort to schedule paid family and 5
medical leave under this section so as not to unduly disrupt the operations of the employer. The 6
covered individual shall provide the employer with prior notice of the schedule on which the 7
covered individual will take the leave, to the extent practicable. Paid family and medical leave 8
taken under this section shall not result in a reduction of the total amount of leave to which an 9
employee is entitled beyond the amount of leave actually taken. 10
(c) Nothing in this section shall be construed to entitle a covered individual to more leave 11
than required under G.S. 96A-3. 12
"§ 96A-7. Leave and employment protection. 13
(a) Any covered individual who exercises his or her right to family and medical leave 14
insurance benefits shall, upon the expiration of that leave, be entitled to be restored by the 15
employer to the position held by the covered individual when the leave commenced, or to a 16
position with equivalent seniority, status, employment benefits, pay, and other terms and 17
conditions of employment, including fringe benefits and service credits that the covered 18
individual had been entitled to at the commencement of leave. 19
(b) During any leave taken pursuant to G.S. 96A-2, the employer shall maintain any 20
health care benefits the covered individual had prior to taking such leave for the duration of the 21
leave as if the covered individual had continued in employment continuously from the date he or 22
she commenced the leave until the date the family and medical leave insurance benefits 23
terminate; provided, however, that the covered individual shall continue to pay the covered 24
individual's share of the cost of health benefits as required prior to the commencement of the 25
leave. 26
(c) Any employer who violates this section or G.S. 96A-8 shall be liable to any eligible 27
employee affected as follows: 28
(1) For damages equal to the amount of (i) any wages, salary, employment 29
benefits, or other compensation denied or lost to such employee by reason of 30
the violation, or (ii) in a case in which wages, salary, employment benefits, or 31
other compensation have not been denied or lost to the employee, any actual 32
monetary losses sustained by the employee as a direct result of the violation, 33
such as the cost of providing care, up to a sum equal to 12 weeks of wages or 34
salary for the employee, (iii) the interest on the amount described in clause (i) 35
of this subdivision calculated at the prevailing rate, and (iv) an additional 36
amount as liquidated damages equal to the sum of the amount described in 37
clause (i) of this subdivision and the interest described in clause (ii) of this 38
subdivision, except that if an employer who has violated this section or 39
G.S. 96A-8 proves to the satisfaction of the court that the act or omission 40
which violated the section was in good faith and that the employer had 41
reasonable grounds for believing that the act or omission was not a violation, 42
the court may, in the discretion of the court, reduce the amount of the liability 43
to the amount and interest determined under clauses (i) and (ii) of this 44
subdivision, respectively. 45
(2) For such equitable relief as may be appropriate, including employment, 46
reinstatement, and promotion. 47
(d) An action to recover the damages or equitable relief prescribed in subsection (c) of 48
this section may be maintained against any employer (including a public agency) in any federal 49
or State court of competent jurisdiction by any one or more employees for and on behalf of the 50
employees or the employees and other employees similarly situated. 51 General Assembly Of North Carolina Session 2025
DRH40426-MC-187 Page 9
(e) The court in such an action shall, in addition to any judgment awarded to the plaintiff, 1
allow a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to 2
be paid by the defendant. 3
(f) Except as provided by subsection (g) of this section, an action may be brought under 4
this section not later than two years after the date of the last event constituting the alleged 5
violation for which the action is brought. 6
(g) In the case of an action brought for a willful violation of this section or G.S. 96A-8, 7
the action may be brought within three years of the date of the last event constituting the alleged 8
violation for which such action is brought. 9
"§ 96A-8. Retaliatory personnel actions prohibited. 10
(a) It shall be unlawful for an employer or any other person to interfere with, restrain, 11
deny the exercise of, or the attempt to exercise any right protected under this Chapter. 12
(b) An employer, temporary help company, employment agency, employee organization, 13
or other person shall not take retaliatory personnel action or otherwise discriminate against a 14
person because he or she exercised rights protected under this Chapter. Such rights include, but 15
are not limited to, the right to request, file for, apply for, or use benefits provided for under this 16
Chapter; to take leave from work under this Chapter; communicate to the employer or any other 17
person or entity an intent to file a claim, a complaint with the Division or courts, or an appeal; or 18
has testified or is about to testify or has assisted in any investigation, hearing, or proceeding under 19
this Chapter, at any time, including during the period in which the person receives family and 20
medical leave insurance benefits under this Chapter; inform any person about any employer's 21
alleged violation of this Chapter; and the right to inform any person of his or her rights under this 22
Chapter. 23
(c) It shall be unlawful for an employer's absence control policy to count paid family and 24
medical leave taken under this Chapter as an absence that may lead to or result in discipline, 25
discharge, demotion, suspension, or any other adverse action. 26
(d) Protections of this section shall apply to any person who mistakenly, but in good faith, 27
alleges violations of this Chapter. 28
(e) This section shall be enforced as provided in subsections (c) through (g) of 29
G.S. 96A-7. 30
"§ 96A-9. Coordination of benefits. 31
(a) Leave taken with wage replacement under this Chapter that also qualifies as leave 32
under the Family and Medical Leave Act shall run concurrently with leave taken under the 33
Family and Medical Leave Act. 34
(b) An employer may require that payment made pursuant to this Chapter be made 35
concurrently or otherwise coordinated with payment made or leave allowed under the terms of 36
disability or family care leave under a collective bargaining agreement or employer policy. The 37
employer must give employees written notice of this requirement. 38
(c) This Chapter does not diminish an employer's obligation to comply with any of the 39
following that provide more generous leave: 40
(1) A collective bargaining agreement; 41
(2) An employer policy; or 42
(3) Any law. 43
(d) An individual's right to leave under this Chapter may not be diminished by a collective 44
bargaining agreement entered into or renewed, or an employer policy adopted or retained, after 45
the effective date of this Chapter. Any agreement by an individual to waive his or her rights under 46
this Chapter is void as against public policy. 47
"§ 96A-10. Notice. 48
(a) Each employer shall provide written notice to each employee upon hiring and 49
annually thereafter. An employer shall also provide written notice to an employee when the 50
employee requests leave under this Chapter or when the employer acquires knowledge that an 51 General Assembly Of North Carolina Session 2025
Page 10 DRH40426-MC-187
employee's leave may be for a qualifying reason under G.S. 96A-2. Such notice shall include (i) 1
the employee's right to family and medical leave insurance benefits under this Chapter and the 2
terms under which it may be used, (ii) the amount of family and medical leave insurance benefits, 3
(iii) the procedure for filing a claim for benefits, (iv) the right to job protection and benefits 4
continuation under G.S. 96A-7, (v) that discrimination and retaliatory personnel actions against 5
a person for requesting, applying for, or using family and medical leave insurance benefits is 6
prohibited under G.S. 96A-8, and (vi) that the employee has a right to file a complaint for 7
violations of this Chapter. An employer shall also display and maintain a poster in a conspicuous 8
place accessible to employees at the employer's place of business that contains the information 9
required by this section in English, Spanish, and any language that is the first language spoken 10
by at least five percent (5%) of the employer's workforce, provided that such notice has been 11
provided by the Division. The Assistant Secretary may adopt regulations to establish additional 12
requirements concerning the means by which employers shall provide such notice. 13
(b) Employees shall provide notice to their employers as soon as practicable of their 14
intention to take leave under this Chapter. 15
"§ 96A-11. Enforcement. 16
(a) The Assistant Secretary shall establish a system for appeals in the case of a denial of 17
family and medical leave insurance benefits. In establishing such system, the Assistant Secretary 18
may utilize any and all procedures and appeals mechanisms established under G.S. 96-15. 19
(b) Judicial review of any decision with respect to family and medical leave insurance 20
benefits shall be permitted in a court of competent jurisdiction after a party aggrieved thereby 21
has exhausted all administrative remedies established by the Assistant Secretary. 22
(c) The Assistant Secretary shall implement procedures to ensure confidentiality of all 23
information related to any claims filed or appeals taken to the maximum extent permitted by 24
applicable laws. 25
"§ 96A-12. Erroneous payments and disqualification for benefits. 26
(a) A covered individual is disqualified from family and medical leave insurance benefits 27
for one year if the individual is determined by the Assistant Secretary to have willfully made a 28
false statement or misrepresentation regarding a material fact or willfully failed to report a 29
material fact to obtain benefits under this Chapter. 30
(b) If family and medical leave insurance benefits are paid erroneously or as a result of 31
willful misrepresentation, or if a claim for family and medical leave insurance benefits is rejected 32
after benefits are paid, the Division may seek repayment of benefits from the recipient. The 33
Assistant Secretary shall exercise his or her discretion to waive, in whole or in part, the amount 34
of any such payments where the recovery would be against equity and good conscience. 35
"§ 96A-13. Elective coverage. 36
(a) A self-employed person, including a sole proprietor, partner, or joint venturer, may 37
elect coverage under this Chapter for an initial period of not less than three years. The 38
self-employed person must file a notice of election in writing with the Assistant Secretary, as 39
required by the Division. The election becomes effective on the date of filing the notice. As a 40
condition of election, the self-employed person must agree to supply any information concerning 41
income that the Division deems necessary. 42
(b) A self-employed person who has elected coverage may withdraw from coverage 43
within 30 days after the end of the three-year period of coverage, or at such other times as the 44
Assistant Secretary may prescribe by rule, by filing written notice with the Assistant Secretary, 45
such withdrawal to take effect not sooner than 30 days after filing the notice. 46
"§ 96A-14. Family and medical leave insurance program. 47
(a) The Division shall establish and administer a family and medical leave insurance 48
program and begin collecting contributions as specified in this Chapter. By January 1, 2027, the 49
Division shall start receiving claims from and paying family and medical leave insurance benefits 50
to covered individuals. 51 General Assembly Of North Carolina Session 2025
DRH40426-MC-187 Page 11
(b) The Division shall establish reasonable procedures and forms for filing claims for 1
benefits under this Chapter and shall specify what supporting documentation is necessary to 2
support a claim for benefits, including any documentation required from a health care provider 3
for proof of a serious health condition. 4
(c) The Division shall notify the employer within five business days of a claim being 5
filed pursuant to this Chapter. 6
(d) The Division shall use information sharing and integration technology to facilitate the 7
disclosure of relevant information or records, so long as an individual consents to the disclosure 8
as required under State law. 9
(e) Information contained in the files and records pertaining to an individual under this 10
Chapter are confidential and not open to public inspection other than to public employees in the 11
performance of their official duties. However, the individual or an authorized representative of 12
an individual may review the records or receive specific information from the records upon the 13
presentation of the individual's signed authorization. 14
(f) The Department of Commerce shall adopt rules as necessary to implement this 15
Chapter. 16
"§ 96A-15. Federal income tax. 17
If the Internal Revenue Service determines that family and medical leave insurance benefits 18
under this Chapter are subject to federal income tax, the Division must advise an individual filing 19
a new claim for family and medical leave insurance benefits, at the time of filing such claim, that 20
the Internal Revenue Service has determined that benefits are subject to federal income tax and 21
that requirements exist pertaining to estimated tax payments. 22
"§ 96A-16. Family and medical leave insurance account fund; establishment and 23
investment. 24
(a) The Paid Family and Medical Leave Fund (Fund) is created in the custody of the 25
Division. Expenditures from the Fund may be used only for the purposes of the family and 26
medical leave insurance benefits program. Only the Assistant Secretary of the Division or the 27
Assistant Secretary's designee may authorize expenditures from the Fund. 28
(b) Whenever, in the judgment of the Division, there shall be in the Fund an amount of 29
funds in excess of that amount deemed by the Division to be sufficient to meet the current 30
expenditures properly payable therefrom, the Division shall have full power to invest, reinvest, 31
manage, contract, sell, or exchange investments acquired with such excess funds in the manner 32
prescribed by North Carolina law. 33
"§ 96A-17. Employer Grant Fund. 34
There is created in the Department of Commerce the Employer Grant Fund to offset the costs 35
of the program for employers that demonstrate the need for financial assistance in meeting the 36
requirements of this Chapter. The Employer Grant Fund shall consist of appropriations from the 37
General Fund. Donations from public agencies and private sources may be accepted if the 38
donations are unconditional and unrestricted. The Department of Commerce shall adopt rules for 39
the administration of the grant funds. 40
"§ 96A-18. Reports. 41
Beginning January 1, 2028, the Division shall report to the General Assembly by April 1 of 42
each year on projected and actual program participation by purpose listed in G.S. 96A-2, gender 43
of beneficiary, premium rates, fund balances, outreach efforts, and, for leaves taken under 44
G.S. 96A-2, family members for whom leave was taken to provide care. 45
"§ 96A-19. Public education. 46
The Division shall conduct a public education campaign to inform workers and employers 47
regarding the availability of family and medical leave insurance benefits. Outreach information 48
shall be available in English, Spanish, French, German, Vietnamese, Chinese, Arabic, Korean, 49
Tagalog, Hindi, Gujarati, Russian, Hmong, and other languages spoken by more than five percent 50
(5%) of the State's population. 51 General Assembly Of North Carolina Session 2025
Page 12 DRH40426-MC-187
"§ 96A-20. Sharing technology. 1
The Division is encouraged to use State data collection and technology to the extent possible 2
and to integrate the program with existing State policies. 3
"§ 96A-21. Severability. 4
If any provision of this Chapter or its application to any person or circumstance is held 5
invalid, the remainder of the Chapter or the application of the provision to other persons or 6
circumstances is not affected." 7
SECTION 6.1.(b) All rules necessary for implementation of this section shall be 8
adopted by October 1, 2025. 9
SECTION 6.1.(c) There is appropriated from the General Fund to the Department 10
of Commerce, Employer Grant Fund, the sum of nineteen million dollars ($19,000,000) for the 11
2025-2026 fiscal year and the sum of thirty million dollars ($30,000,000) in the 2026-2027 fiscal 12
year to offset employer costs of the Paid Family Medical Leave Act as enacted by this section. 13
SECTION 6.1.(d) This section becomes effective July 1, 2025. 14
15
EFFECTIVE DATE 16
SECTION 7.1. Except as otherwise provided, this act is effective when it becomes 17
law. 18