North Carolina 2025-2026 Regular Session

North Carolina House Bill H786 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	H 1
4		-	HOUSE BILL 786
	3	+	H D
	4	+	HOUSE BILL DRH40426-MC-187
	5	+
5	6
6	7
7	8		Short Title: Working Families Act. (Public)
8		-	Sponsors: Representatives Pittman, Ball, G. Pierce, and Lofton (Primary Sponsors).
9		-	For a complete list of sponsors, refer to the North Carolina General Assembly web site.
10		-	Referred to: Rules, Calendar, and Operations of the House
11		-	April 7, 2025
12		-	H786 -v-1
	9	+	Sponsors: Representative Pittman.
	10	+	Referred to:
	11	+
	12	+	DRH40426 -MC-187
13	13		A BILL TO BE ENTITLED 1
14	14		AN ACT REDUCING PARENT COPAYMENTS FOR SUBSIDIZED CHILD CARE, 2
15	15		REENACTING THE CHILD TAX CREDIT, RAISING THE STATE MINIMUM WAGE 3
16	16		IN PHASES UP TO FIFTEEN DOLLARS PER HOUR , ALLOWING A HIGHER LOCAL 4
17	17		MINIMUM WAGE, INCREASING THE INCOME ELIGIBILITY LIMIT FOR THE 5
18	18		PROPERTY TAX HOMESTEAD CIRCUIT BREAKER, CREATING A HOMEBUYERS ' 6
19	19		ASSISTANCE PROGRAM WITH THE NORTH CAROLINA HOUSING FINANCE 7
20	20		AGENCY FOR FIRST-TIME HOMEBUYERS WHO WORK AS PUBLIC SERVANTS, 8
21	21		AND ENACTING THE NORTH CAROLINA PAID FAMILY LEAVE INSURANCE ACT 9
22	22		TO HELP WORKING FAMILIES AND CREATING THE EMPLOYER GRANT FUND 10
23	23		TO OFFSET COSTS INCURRED BY EMPLOYERS AND APPROPRIATING FUNDS 11
24	24		FOR THAT PURPOSE. 12
25	25		The General Assembly of North Carolina enacts: 13
26	26		14
27	27		CHILD CARE SUBSIDIES 15
28	28		SECTION 1.1.(a) Section 9D.3(b) of S.L. 2023-134 reads as rewritten: 16
29	29		"SECTION 9D.3.(b) Fees for families who are required to share in the cost of care are 17
30	30		established based on ten percent (10%) seven percent (7%) of gross family income. When care 18
31	31		is received at the blended rate, the copayment shall be eighty-three percent (83%) of the full-time 19
32	32		copayment. Copayments for part-time care shall be seventy-five percent (75%) of the full-time 20
33	33		copayment." 21
34	34		SECTION 1.1.(b) This section becomes effective July 1, 2025. 22
35	35		23
36	36		REENACT CHILD TAX CREDIT 24
37	37		SECTION 2.1.(a) G.S. 105-153.10 is reenacted as it existed immediately before its 25
38	38		expiration and reads as rewritten: 26
39	39		"§ 105-153.10. Credit for children. 27
40	40		(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 28
41	41		Code for the taxable year is allowed a credit against the tax imposed by this Part for each 29
42	42		dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 30
43	43		credit against the tax imposed by this Part for each qualifying child of the taxpayer. A "qualifying 31
44	44		child" is defined by section 152(c) of the Code. The amount of credit allowed under this section 32
45	45		for the taxable year is equal to the amount listed in the table below based on the taxpayer's 33
46	46		adjusted gross income, as calculated under the Code: 34
47		-	Filing Status AGI Credit Amount 35 General Assembly Of North Carolina Session 2025
48		-	Page 2 House Bill 786-First Edition
49		-	Married, filing jointly Up to $40,000 $125.00$250.00 1
50		-	Over $40,000 2
51		-	Up to $100,000 $100.00$125.00 3
52		-	Over $100,000 0 4
53		-	5
54		-	Head of Household Up to $32,000 $125.00$250.00 6
55		-	Over $32,000 7
56		-	Up to $80,000 $100.00$125.00 8
57		-	Over $80,000 0 9
58		-	10
59		-	Single Up to $20,000 $125.00$250.00 11
60		-	Over $20,000 12
61		-	Up to $50,000 $100.00$125.00 13
62		-	Over $50,000 0 14
63		-	15
64		-	Married, filing separately Up to $20,000 $125.00$250.00 16
65		-	Over $20,000 17
66		-	Up to $50,000 $100.00$125.00 18
67		-	Over $50,000 0. 19
68		-	20
69		-	(b) Limitations. – A nonresident or part-year resident who claims the credit allowed by 21
70		-	this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 22
71		-	G.S. 105-134.5(b) or (c), as appropriate.The credit allowed under this section may not exceed the 23
72		-	amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, 24
73		-	except payments of tax made by or on behalf of the taxpayer.G.S. 105-153.4. Married individuals 25
74		-	qualifying for a credit under this section who file separate returns may not collectively claim 26
75		-	more than the maximum credit allowed under a joint return. 27
76		-	(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 28
77		-	imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 29
78		-	must refund the excess to the taxpayer. The refundable excess is governed by the provisions 30
79		-	governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In 31
80		-	computing the amount of tax against which multiple credits are allowed, nonrefundable credits 32
81		-	are subtracted before refundable credits." 33
82		-	SECTION 2.1.(b) This section is effective for taxable years beginning on or after 34
83		-	January 1, 2025. 35
84		-	36
85		-	INCREASE STATE WIDE MINIMUM WAGE AND ALLOW HIGHER LOCAL 37
86		-	MINIMUM WAGE 38
87		-	SECTION 3.1. G.S. 95-25.3 reads as rewritten: 39
88		-	"§ 95-25.3. Minimum wage. 40
89		-	(a) Every employer shall pay to each employee who in any workweek performs any work, 41
90		-	wages of at least six dollars and fifteen cents ($6.15) per hour or the minimum wage the amount 42
91		-	set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 206(a)(1), as 43
92		-	that wage may change from time to time, whichever is higher, except as otherwise provided in 44
93		-	this section.or the amount set forth below in this subsection, whichever is higher: 45
94		-	(1) Effective January 1, 2026, wages of at least ten dollars ($10.00) per hour. 46
95		-	(2) Effective January 1, 2027, wages of at least twelve dollars ($12.00) per hour. 47
96		-	(3) Effective January 1, 2028, wages of at least thirteen dollars ($13.00) per hour. 48
97		-	(4) Effective January 1, 2029, wages of at least fourteen dollars ($14.00) per hour. 49
98		-	(5) Effective January 1, 2030, wages of at least fifteen dollars ($15.00) per hour. 50 General Assembly Of North Carolina Session 2025
99		-	House Bill 786-First Edition Page 3
100		-	(6) Effective January 1, 2031, and annually thereafter, the amount determined by 1
101		-	the Commissioner of Labor under subsection (a1) of this section. 2
102		-	(a1) Beginning September 30, 2030, and on each September 30 thereafter, the 3
103		-	Commissioner of Labor shall calculate an adjusted minimum wage rate indexed to the percentage 4
104		-	increase in the Consumer Price Index (All 29 Urban Consumers, U.S. City Average for All 5
105		-	Items), CPI-I, or its successor index, as calculated by the U.S. Department of Labor for the 6
106		-	12-month period preceding the previous September 1. Each adjusted minimum wage rate 7
107		-	calculated shall be published on September 30 and take effect on the following January 1. 8
108		-	…." 9
109		-	10
110		-	INCOME ELIGIBILITY/PROPERTY TAX HOMESTEAD CIRCUIT BREAKER 11
111		-	SECTION 4.1.(a) G.S. 105-277.1B reads as rewritten: 12
112		-	"§ 105-277.1B. Property tax homestead circuit breaker. 13
113		-	(a) Classification. – A permanent residence owned and occupied by a qualifying owner 14
114		-	is designated a special class of property under Article V, Section 2(2) of the North Carolina 15
115		-	Constitution and is taxable in accordance with this section. 16
116		-	… 17
117		-	(f) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 18
118		-	of tax that is imposed for the current tax year on his or her permanent residence and exceeds the 19
119		-	percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 20
120		-	residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 21
121		-	limit imposed by this section, then both the taxes due under this section and the taxes deferred 22
122		-	under this section must be apportioned among the taxing units based upon the ratio each taxing 23
123		-	unit's tax rate bears to the total tax rate of all units. 24
124		-	Income Over Income Up To Percentage 25
125		-	-0- Income Eligibility Limit 4.0% 26
126		-	Income Eligibility Limit 150% 180% of Income Eligibility Limit 5.0% 27
127		-	…." 28
128		-	SECTION 4.1.(b) This section is effective for taxes imposed for taxable years 29
129		-	beginning on or after July 1, 2025. 30
130		-	31
131		-	HOMEBUYERS' ASSISTANCE PROGRAM 32
132		-	SECTION 5.1.(a) As used in this section, the following definitions apply: 33
133		-	(1) Active duty member. – As defined in G.S. 58-58-335(1). 34
134		-	(2) Emergency medical services personnel. – As defined in G.S. 131E-155(7). 35
135		-	(3) Firefighter. – As defined in G.S. 58-84-5(3a). 36
136		-	(4) First-time homebuyer. – An individual who meets all of the following criteria: 37
137		-	a. Is purchasing the subject residential property. 38
138		-	b. Will reside in the subject residential property as a principal residence. 39
139		-	c. Has had no ownership interest, sole or joint, in a residential property 40
140		-	during the three-year period preceding the date of the purchase of the 41
141		-	subject residential property. 42
142		-	(5) Law enforcement officer. – An individual employed by the State or a local 43
143		-	government in this State as a sheriff, deputy sheriff, police officer, or member 44
144		-	of the State highway patrol. 45
145		-	(6) Public servant. – An active duty member or veteran, or a law enforcement 46
146		-	officer, teacher, firefighter, or emergency medical services personnel 47
147		-	employed in this State. 48
148		-	(7) Teacher. – An individual whose major responsibility is to either teach or 49
149		-	directly supervise teaching, as classified by the State Board of Education, in a 50
150		-	public school unit, as that term is defined in G.S. 115C-5(7a). 51 General Assembly Of North Carolina Session 2025
151		-	Page 4 House Bill 786-First Edition
152		-	(8) Veteran. – As defined in G.S. 122C-465(3). 1
153		-	SECTION 5.1.(b) The Housing Finance Agency (Agency) shall establish a program 2
154		-	operating under the Homeownership Assistance Fund, authorized under G.S. 122A-5.7, that 3
155		-	provides assistance to first-time homebuyers that are employed full time as public servants in this 4
156		-	State. The Agency shall provide, in the form of reimbursement or direct payment, monies to be 5
157		-	used for down payment assistance and to offset mortgage insurance premiums charged to 6
158		-	program participants. First-time homebuyers shall be limited to the lesser of the sum of 7
159		-	twenty-five thousand dollars ($25,000) or ten percent (10%) of the purchase price for down 8
160		-	payment assistance, mortgage insurance premium assistance, and closing costs. The Agency may 9
161		-	provide for mortgage insurance payment assistance at least monthly but for no longer than 60 10
162		-	months for any single first-time homebuyer. 11
163		-	SECTION 5.1.(c) The Agency is hereby empowered to adopt, modify, or repeal 12
164		-	rules and regulations governing the provision of down payment assistance and mortgage 13
165		-	insurance assistance provided pursuant to this section. 14
166		-	SECTION 5.1.(d) There is appropriated from the General Fund to the 15
167		-	Homeownership Assistance Fund, authorized under G.S. 122A-5.7, the sum of one hundred fifty 16
168		-	million dollars ($150,000,000) in recurring funds for the 2025-2026 fiscal year to be used for the 17
169		-	purposes provided in this act. 18
170		-	SECTION 5.1.(e) This section becomes effective July 1, 2025. 19
171		-	20
172		-	PAID FAMILY LEAVE INSURANCE 21
173		-	SECTION 6.1.(a) Effective January 1, 2026, the General Statutes are amended by 22
174		-	adding a new Chapter to read: 23
175		-	"Chapter 96A. 24
176		-	"Paid Family Leave Insurance Act. 25
177		-	"§ 96A-1. Short title; definitions. 26
178		-	(a) This Chapter shall be known and may be cited as the "North Carolina Paid Family 27
179		-	Leave Insurance Act." 28
180		-	(b) The following definitions apply in this Chapter: 29
181		-	(1) Application year. – The 12-month period beginning on the first day of the 30
182		-	calendar week in which an individual files an application for family and 31
183		-	medical leave insurance benefits. 32
184		-	(2) Assistant Secretary. – The Assistant Secretary of Commerce in charge of the 33
185		-	Division of Employment Security. 34
186		-	(3) Covered individual. – Any person who does all of the following: 35
187		-	a. Meets the monetary eligibility criteria set forth in G.S. 96-14.1(b) or 36
188		-	is self-employed, elects coverage, and meets the requirements of 37
189		-	G.S. 96A-13. 38
190		-	b. Meets the administrative requirements outlined in this Chapter and in 39
191		-	the rules adopted under this Chapter. 40
192		-	c. Submits an application. 41
193		-	(4) Covered service member. – Either: 42
194		-	a. A member of the Armed Forces, including a member of the National 43
195		-	Guard or Reserves, who is (i) undergoing medical treatment, 44
196		-	recuperation, or therapy, (ii) otherwise in outpatient status, or (iii) 45
197		-	otherwise on the temporary disability retired list for a serious injury or 46
198		-	illness that was incurred by the member in the line of duty on active 47
199		-	duty in the Armed Forces or a serious injury or illness that existed 48
200		-	before the beginning of the member's active duty and was aggravated 49
201		-	by service in the line of duty on active duty in the Armed Forces; or 50 General Assembly Of North Carolina Session 2025
202		-	House Bill 786-First Edition Page 5
203		-	b. A former member of the Armed Forces, including a former member of 1
204		-	the National Guard or Reserves, who is undergoing medical treatment, 2
205		-	recuperation, or therapy for a serious injury or illness that was incurred 3
206		-	by the member in the line of duty on active duty in the Armed Forces 4
207		-	or a serious injury or illness that existed before the beginning of the 5
208		-	member's active duty and was aggravated by service in the line of duty 6
209		-	on active duty in the Armed Forces and manifested before or after the 7
210		-	member was discharged or released from service. 8
211		-	(5) Division. – The Division of Employment Security of the Department of 9
212		-	Commerce. 10
213		-	(6) Employee. – Any individual employed by an employer. 11
214		-	(7) Employer. – Any person acting directly or indirectly in the interest of an 12
215		-	employer in relation to an employee. As used in this subdivision, "person" 13
216		-	means an individual, partnership, association, corporation, business trust, 14
217		-	legal representative, or any organized group of persons. For the purposes of 15
218		-	this Chapter, it also means the State of North Carolina, any city, town, county, 16
219		-	municipality, or any State or local agency or instrumentality of government. 17
220		-	The term does not include the government of the United States and any agency 18
221		-	of the United States (including the United States Postal Service and Postal 19
222		-	Rate Commission). 20
223		-	(8) Family and medical leave insurance benefits. – The benefits provided under 21
224		-	the terms of this Chapter. 22
225		-	(9) Family member. – Any of the following: 23
226		-	a. Regardless of age, a biological, adopted, or foster child, stepchild, or 24
227		-	legal ward, a child of a domestic partner, a child to whom the employee 25
228		-	stands in loco parentis, or a person to whom the employee stood in 26
229		-	loco parentis when the person was a minor. 27
230		-	b. A biological, adoptive, or foster parent, stepparent, or legal guardian 28
231		-	of an employee or an employee's spouse or domestic partner or a 29
232		-	person who stood in loco parentis when the employee or the 30
233		-	employee's spouse or domestic partner was a minor. 31
234		-	c. A person to whom the employee is legally married under the laws of 32
235		-	any state or a domestic partner of an employee as registered under the 33
236		-	laws of any state or political subdivision. 34
237		-	d. A grandparent, grandchild, or sibling (whether a biological, foster, 35
238		-	adoptive, or step relationship) of the employee or the employee's 36
239		-	spouse or domestic partner. 37
240		-	e. Any other individual related by blood or whose close association with 38
241		-	the employee is the equivalent of a family relationship. 39
242		-	(10) Health care provider. – Any person licensed under federal or North Carolina 40
243		-	law to provide medical or emergency services, including, but not limited to, 41
244		-	doctors, nurses and emergency room personnel, or certified midwives. 42
245		-	(11) Next of kin. – As defined in section 101(17) of the Family and Medical Leave 43
246		-	Act, 29 U.S.C. § 2611(17). 44
247		-	(12) Qualifying exigency leave. – Leave based on a need arising out of a covered 45
248		-	individual's family member's active duty service or notice of an impending 46
249		-	call or order to active duty in the Armed Forces, including, but not limited to, 47
250		-	providing for the care or other needs of the military member's child or other 48
251		-	family member, making financial or legal arrangements for the military 49
252		-	member, attending counseling, attending military events or ceremonies, 50
253		-	spending time with the military member during a rest and recuperation leave 51 General Assembly Of North Carolina Session 2025
254		-	Page 6 House Bill 786-First Edition
255		-	or following return from deployment, or making arrangements following the 1
256		-	death of the military member. 2
257		-	(13) Retaliatory personnel action. – Denial of any right guaranteed under this 3
258		-	Chapter, including, but not limited to, any threat, discharge, suspension, 4
259		-	demotion, reduction of hours, any other adverse action against an employee 5
260		-	for the exercise of any right guaranteed herein, or reporting or threatening to 6
261		-	report an employee's suspected citizenship or immigration status or the 7
262		-	suspected citizenship or immigration status of a family member of the 8
263		-	employee to a federal, State, or local agency. Retaliatory personnel actions 9
264		-	shall also include interference with or punishment for in any manner 10
265		-	participating in or assisting an investigation, proceeding, or hearing under this 11
266		-	Chapter. 12
267		-	(14) Serious health condition. – An illness, injury, impairment, pregnancy, 13
268		-	recovery from childbirth, or physical or mental condition that involves 14
269		-	inpatient care in a hospital, hospice, or residential medical care facility, or 15
270		-	continuing treatment by a health care provider. 16
271		-	(15) State average weekly wage. – The average weekly insured wage as defined in 17
272		-	G.S. 96-1(b)(2). 18
273		-	"§ 96A-2. Eligibility for benefits. 19
274		-	Beginning January 1, 2026, family and medical leave insurance benefits are payable to an 20
275		-	individual who: 21
276		-	(1) Meets the definition of "covered individual" as defined by G.S. 96A-1(b)(3); 22
277		-	and 23
278		-	(2) Meets one of the following requirements: 24
279		-	a. Because of birth, adoption, or placement through foster care, is caring 25
280		-	for a new child during the first year after the birth, adoption, or 26
281		-	placement of that child; 27
282		-	b. Is caring for a family member with a serious health condition; 28
283		-	c. Has a serious health condition; 29
284		-	d. Is caring for a covered service member who is the covered individual's 30
285		-	next of kin or other family member; or 31
286		-	e. Because of any "qualifying exigency leave" arising out of the fact that 32
287		-	the family member of the covered individual is on active duty (or has 33
288		-	been notified of an impending call or order to active duty) in the 34
289		-	Armed Forces. 35
290		-	"§ 96A-3. Duration of benefits. 36
291		-	(a) The maximum number of weeks during which family and medical leave insurance 37
292		-	benefits are payable under G.S. 96A-2(2)c. in an application year is 18 weeks. 38
293		-	(b) The maximum number of weeks during which family and medical leave insurance 39
294		-	benefits are payable under G.S. 96A-2(2)a., (2)b., or (2)e. in an application year is 12 weeks. 40
295		-	(c) The maximum number of weeks during which family and medical leave insurance 41
296		-	benefits are payable under G.S. 96A-2(2)d. in an application year is 26 weeks. 42
297		-	(d) The first payment of benefits must be made to an individual within two weeks after 43
298		-	the claim is filed, and subsequent payments must be made every two weeks thereafter. 44
299		-	"§ 96A-4. Amount of benefits. 45
300		-	(a) The amount of family and medical leave insurance benefits shall be determined as 46
301		-	follows: 47
302		-	(1) The weekly benefit shall be determined as follows: (i) the portion of the 48
303		-	covered individual's average weekly wage that is equal to or less than one 49
304		-	hundred percent (100%) of the State average weekly wage shall be replaced 50
305		-	at a rate of ninety percent (90%) and (ii) the portion of an employee's or 51 General Assembly Of North Carolina Session 2025
306		-	House Bill 786-First Edition Page 7
307		-	self-employed individual's average weekly wage that is more than one 1
308		-	hundred percent (100%) of the State average weekly wage shall be replaced 2
309		-	at a rate of fifty percent (50%). 3
310		-	(2) The maximum benefit shall be one hundred percent (100%) of the statewide 4
311		-	average weekly wage. 5
312		-	(3) The minimum weekly benefit shall not be less than one hundred dollars 6
313		-	($100.00) per week except that if the covered individual's average weekly 7
314		-	wage is less than one hundred dollars ($100.00) per week, the weekly benefit 8
315		-	shall be the employee's full wage. 9
316		-	(4) For purposes of this section, a covered individual's average weekly wage shall 10
317		-	be the average weekly wage during the 12 months preceding submission of 11
318		-	the application (or the average weekly wage during the time the covered 12
319		-	individual worked, if it was less than 12 months). 13
320		-	(b) Family and medical leave insurance benefits are not payable for less than eight hours 14
321		-	of family and medical leave taken in one workweek. 15
322		-	"§ 96A-5. Contributions. 16
323		-	(a) Payroll contributions shall be authorized in order to finance the payment of benefits 17
324		-	under the family and medical leave insurance program. 18
325		-	(b) Beginning on January 1, 2026, for each employee, an employer shall remit to the Paid 19
326		-	Family and Medical Leave Fund (Fund), established under G.S. 96A-16, contributions in the 20
327		-	form and manner determined by the Division. Annually, not later than October 1, the Assistant 21
328		-	Secretary shall fix the contribution rate for the coming calendar year in the manner described in 22
329		-	this subsection. For calendar years 2026 and 2027, the Assistant Secretary shall do so based on 23
330		-	sound actuarial principles. For calendar year 2028 and thereafter, the Assistant Secretary shall 24
331		-	first certify and publish the following information: 25
332		-	(1) The total amount of family and medical leave insurance benefits paid by the 26
333		-	Division during the previous fiscal year; 27
334		-	(2) The total amount remaining in the Fund at the close of the fiscal year; 28
335		-	(3) The total amount equal to one hundred forty percent (140%) of the previous 29
336		-	fiscal year's expenditure for family and medical leave insurance benefits paid 30
337		-	and for the administration of the family and medical leave insurance program; 31
338		-	(4) The amount by which the total amount remaining in the Fund at the close of 32
339		-	the previous fiscal year is less than or greater than one hundred forty percent 33
340		-	(140%) of the previous fiscal year's expenditure for family and medical leave 34
341		-	insurance benefits paid and for the administration of the family and medical 35
342		-	leave insurance program; and 36
343		-	(5) The amount by which the contribution rate shall be adjusted to ensure that the 37
344		-	Fund shall maintain or achieve an annualized amount of not less than one 38
345		-	hundred forty percent (140%) of the previous fiscal year's expenditure for 39
346		-	family and medical leave insurance benefits paid and for the administration of 40
347		-	the family and medical leave insurance program. The contribution rate 41
348		-	adjustment, if any, made as the result of the Assistant Secretary's certification 42
349		-	and report under this subsection shall supersede the rate previously set forth 43
350		-	and shall become effective on January 1 of the following calendar year. 44
351		-	(c) A self-employed individual who is electing coverage under G.S. 96A-13 shall be 45
352		-	responsible for the employee's share of contributions set forth in subsection (b) of this section on 46
353		-	that individual's income from self-employment. 47
354		-	(d) An employer shall not deduct more than fifty percent (50%) of the contribution 48
355		-	required for an employee by subsection (b) of this section from that employee's wages and shall 49
356		-	remit the full contribution required under said subsection to the Fund. 50
357		-	"§ 96A-6. Reduced leave schedule. 51 General Assembly Of North Carolina Session 2025
358		-	Page 8 House Bill 786-First Edition
	47	+	Filing Status AGI Credit Amount 35
	48	+	Married, filing jointly Up to $40,000 $125.00$250.00 36
	49	+	H.B. 786
	50	+	Apr 3, 2025
	51	+	HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	52	+	Page 2 DRH40426-MC-187
	53	+	Over $40,000 1
	54	+	Up to $100,000 $100.00$125.00 2
	55	+	Over $100,000 0 3
	56	+	4
	57	+	Head of Household Up to $32,000 $125.00$250.00 5
	58	+	Over $32,000 6
	59	+	Up to $80,000 $100.00$125.00 7
	60	+	Over $80,000 0 8
	61	+	9
	62	+	Single Up to $20,000 $125.00$250.00 10
	63	+	Over $20,000 11
	64	+	Up to $50,000 $100.00$125.00 12
	65	+	Over $50,000 0 13
	66	+	14
	67	+	Married, filing separately Up to $20,000 $125.00$250.00 15
	68	+	Over $20,000 16
	69	+	Up to $50,000 $100.00$125.00 17
	70	+	Over $50,000 0. 18
	71	+	19
	72	+	(b) Limitations. – A nonresident or part-year resident who claims the credit allowed by 20
	73	+	this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 21
	74	+	G.S. 105-134.5(b) or (c), as appropriate.The credit allowed under this section may not exceed the 22
	75	+	amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, 23
	76	+	except payments of tax made by or on behalf of the taxpayer.G.S. 105-153.4. Married individuals 24
	77	+	qualifying for a credit under this section who file separate returns may not collectively claim 25
	78	+	more than the maximum credit allowed under a joint return. 26
	79	+	(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 27
	80	+	imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 28
	81	+	must refund the excess to the taxpayer. The refundable excess is governed by the provisions 29
	82	+	governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In 30
	83	+	computing the amount of tax against which multiple credits are allowed, nonrefundable credits 31
	84	+	are subtracted before refundable credits." 32
	85	+	SECTION 2.1.(b) This section is effective for taxable years beginning on or after 33
	86	+	January 1, 2025. 34
	87	+	35
	88	+	INCREASE STATEWIDE MINIMUM WAGE AND ALLOW HIGHER LOCAL 36
	89	+	MINIMUM WAGE 37
	90	+	SECTION 3.1. G.S. 95-25.3 reads as rewritten: 38
	91	+	"§ 95-25.3. Minimum wage. 39
	92	+	(a) Every employer shall pay to each employee who in any workweek performs any work, 40
	93	+	wages of at least six dollars and fifteen cents ($6.15) per hour or the minimum wage the amount 41
	94	+	set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 206(a)(1), as 42
	95	+	that wage may change from time to time, whichever is higher, except as otherwise provided in 43
	96	+	this section.or the amount set forth below in this subsection, whichever is higher: 44
	97	+	(1) Effective January 1, 2026, wages of at least ten dollars ($10.00) per hour. 45
	98	+	(2) Effective January 1, 2027, wages of at least twelve dollars ($12.00) per hour. 46
	99	+	(3) Effective January 1, 2028, wages of at least thirteen dollars ($13.00) per hour. 47
	100	+	(4) Effective January 1, 2029, wages of at least fourteen dollars ($14.00) per hour. 48
	101	+	(5) Effective January 1, 2030, wages of at least fifteen dollars ($15.00) per hour. 49
	102	+	(6) Effective January 1, 2031, and annually thereafter, the amount determined by 50
	103	+	the Commissioner of Labor under subsection (a1) of this section. 51 General Assembly Of North Carolina Session 2025
	104	+	DRH40426-MC-187 Page 3
	105	+	(a1) Beginning September 30, 2030, and on each September 30 thereafter, the 1
	106	+	Commissioner of Labor shall calculate an adjusted minimum wage rate indexed to the percentage 2
	107	+	increase in the Consumer Price Index (All 29 Urban Consumers, U.S. City Average for All 3
	108	+	Items), CPI-I, or its successor index, as calculated by the U.S. Department of Labor for the 4
	109	+	12-month period preceding the previous September 1. Each adjusted minimum wage rate 5
	110	+	calculated shall be published on September 30 and take effect on the following January 1. 6
	111	+	…." 7
	112	+	8
	113	+	INCOME ELIGIBILITY/PROPERTY TAX HOMESTEAD CIRCUIT BREAKER 9
	114	+	SECTION 4.1.(a) G.S. 105-277.1B reads as rewritten: 10
	115	+	"§ 105-277.1B. Property tax homestead circuit breaker. 11
	116	+	(a) Classification. – A permanent residence owned and occupied by a qualifying owner 12
	117	+	is designated a special class of property under Article V, Section 2(2) of the North Carolina 13
	118	+	Constitution and is taxable in accordance with this section. 14
	119	+	… 15
	120	+	(f) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 16
	121	+	of tax that is imposed for the current tax year on his or her permanent residence and exceeds the 17
	122	+	percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 18
	123	+	residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 19
	124	+	limit imposed by this section, then both the taxes due under this section and the taxes deferred 20
	125	+	under this section must be apportioned among the taxing units based upon the ratio each taxing 21
	126	+	unit's tax rate bears to the total tax rate of all units. 22
	127	+	Income Over Income Up To Percentage 23
	128	+	-0- Income Eligibility Limit 4.0% 24
	129	+	Income Eligibility Limit 150% 180% of Income Eligibility Limit 5.0% 25
	130	+	…." 26
	131	+	SECTION 4.1.(b) This section is effective for taxes imposed for taxable years 27
	132	+	beginning on or after July 1, 2025. 28
	133	+	29
	134	+	HOMEBUYERS ' ASSISTANCE PROGRAM 30
	135	+	SECTION 5.1.(a) As used in this section, the following definitions apply: 31
	136	+	(1) Active duty member. – As defined in G.S. 58-58-335(1). 32
	137	+	(2) Emergency medical services personnel. – As defined in G.S. 131E-155(7). 33
	138	+	(3) Firefighter. – As defined in G.S. 58-84-5(3a). 34
	139	+	(4) First-time homebuyer. – An individual who meets all of the following criteria: 35
	140	+	a. Is purchasing the subject residential property. 36
	141	+	b. Will reside in the subject residential property as a principal residence. 37
	142	+	c. Has had no ownership interest, sole or joint, in a residential property 38
	143	+	during the three-year period preceding the date of the purchase of the 39
	144	+	subject residential property. 40
	145	+	(5) Law enforcement officer. – An individual employed by the State or a local 41
	146	+	government in this State as a sheriff, deputy sheriff, police officer, or member 42
	147	+	of the State highway patrol. 43
	148	+	(6) Public servant. – An active duty member or veteran, or a law enforcement 44
	149	+	officer, teacher, firefighter, or emergency medical services personnel 45
	150	+	employed in this State. 46
	151	+	(7) Teacher. – An individual whose major responsibility is to either teach or 47
	152	+	directly supervise teaching, as classified by the State Board of Education, in a 48
	153	+	public school unit, as that term is defined in G.S. 115C-5(7a). 49
	154	+	(8) Veteran. – As defined in G.S. 122C-465(3). 50 General Assembly Of North Carolina Session 2025
	155	+	Page 4 DRH40426-MC-187
	156	+	SECTION 5.1.(b) The Housing Finance Agency (Agency) shall establish a program 1
	157	+	operating under the Homeownership Assistance Fund, authorized under G.S. 122A-5.7, that 2
	158	+	provides assistance to first-time homebuyers that are employed full time as public servants in this 3
	159	+	State. The Agency shall provide, in the form of reimbursement or direct payment, monies to be 4
	160	+	used for down payment assistance and to offset mortgage insurance premiums charged to 5
	161	+	program participants. First-time homebuyers shall be limited to the lesser of the sum of 6
	162	+	twenty-five thousand dollars ($25,000) or ten percent (10%) of the purchase price for down 7
	163	+	payment assistance, mortgage insurance premium assistance, and closing costs. The Agency may 8
	164	+	provide for mortgage insurance payment assistance at least monthly but for no longer than 60 9
	165	+	months for any single first-time homebuyer. 10
	166	+	SECTION 5.1.(c) The Agency is hereby empowered to adopt, modify, or repeal 11
	167	+	rules and regulations governing the provision of down payment assistance and mortgage 12
	168	+	insurance assistance provided pursuant to this section. 13
	169	+	SECTION 5.1.(d) There is appropriated from the General Fund to the 14
	170	+	Homeownership Assistance Fund, authorized under G.S. 122A-5.7, the sum of one hundred fifty 15
	171	+	million dollars ($150,000,000) in recurring funds for the 2025-2026 fiscal year to be used for the 16
	172	+	purposes provided in this act. 17
	173	+	SECTION 5.1.(e) This section becomes effective July 1, 2025. 18
	174	+	19
	175	+	PAID FAMILY LEAVE INSURANCE 20
	176	+	SECTION 6.1.(a) Effective January 1, 2026, the General Statutes are amended by 21
	177	+	adding a new Chapter to read: 22
	178	+	"Chapter 96A. 23
	179	+	"Paid Family Leave Insurance Act. 24
	180	+	"§ 96A-1. Short title; definitions. 25
	181	+	(a) This Chapter shall be known and may be cited as the "North Carolina Paid Family 26
	182	+	Leave Insurance Act." 27
	183	+	(b) The following definitions apply in this Chapter: 28
	184	+	(1) Application year. – The 12-month period beginning on the first day of the 29
	185	+	calendar week in which an individual files an application for family and 30
	186	+	medical leave insurance benefits. 31
	187	+	(2) Assistant Secretary. – The Assistant Secretary of Commerce in charge of the 32
	188	+	Division of Employment Security. 33
	189	+	(3) Covered individual. – Any person who does all of the following: 34
	190	+	a. Meets the monetary eligibility criteria set forth in G.S. 96-14.1(b) or 35
	191	+	is self-employed, elects coverage, and meets the requirements of 36
	192	+	G.S. 96A-13. 37
	193	+	b. Meets the administrative requirements outlined in this Chapter and in 38
	194	+	the rules adopted under this Chapter. 39
	195	+	c. Submits an application. 40
	196	+	(4) Covered service member. – Either: 41
	197	+	a. A member of the Armed Forces, including a member of the National 42
	198	+	Guard or Reserves, who is (i) undergoing medical treatment, 43
	199	+	recuperation, or therapy, (ii) otherwise in outpatient status, or (iii) 44
	200	+	otherwise on the temporary disability retired list for a serious injury or 45
	201	+	illness that was incurred by the member in the line of duty on active 46
	202	+	duty in the Armed Forces or a serious injury or illness that existed 47
	203	+	before the beginning of the member's active duty and was aggravated 48
	204	+	by service in the line of duty on active duty in the Armed Forces; or 49
	205	+	b. A former member of the Armed Forces, including a former member of 50
	206	+	the National Guard or Reserves, who is undergoing medical treatment, 51 General Assembly Of North Carolina Session 2025
	207	+	DRH40426-MC-187 Page 5
	208	+	recuperation, or therapy for a serious injury or illness that was incurred 1
	209	+	by the member in the line of duty on active duty in the Armed Forces 2
	210	+	or a serious injury or illness that existed before the beginning of the 3
	211	+	member's active duty and was aggravated by service in the line of duty 4
	212	+	on active duty in the Armed Forces and manifested before or after the 5
	213	+	member was discharged or released from service. 6
	214	+	(5) Division. – The Division of Employment Security of the Department of 7
	215	+	Commerce. 8
	216	+	(6) Employee. – Any individual employed by an employer. 9
	217	+	(7) Employer. – Any person acting directly or indirectly in the interest of an 10
	218	+	employer in relation to an employee. As used in this subdivision, "person" 11
	219	+	means an individual, partnership, association, corporation, business trust, 12
	220	+	legal representative, or any organized group of persons. For the purposes of 13
	221	+	this Chapter, it also means the State of North Carolina, any city, town, county, 14
	222	+	municipality, or any State or local agency or instrumentality of government. 15
	223	+	The term does not include the government of the United States and any agency 16
	224	+	of the United States (including the United States Postal Service and Postal 17
	225	+	Rate Commission). 18
	226	+	(8) Family and medical leave insurance benefits. – The benefits provided under 19
	227	+	the terms of this Chapter. 20
	228	+	(9) Family member. – Any of the following: 21
	229	+	a. Regardless of age, a biological, adopted, or foster child, stepchild, or 22
	230	+	legal ward, a child of a domestic partner, a child to whom the employee 23
	231	+	stands in loco parentis, or a person to whom the employee stood in 24
	232	+	loco parentis when the person was a minor. 25
	233	+	b. A biological, adoptive, or foster parent, stepparent, or legal guardian 26
	234	+	of an employee or an employee's spouse or domestic partner or a 27
	235	+	person who stood in loco parentis when the employee or the 28
	236	+	employee's spouse or domestic partner was a minor. 29
	237	+	c. A person to whom the employee is legally married under the laws of 30
	238	+	any state or a domestic partner of an employee as registered under the 31
	239	+	laws of any state or political subdivision. 32
	240	+	d. A grandparent, grandchild, or sibling (whether a biological, foster, 33
	241	+	adoptive, or step relationship) of the employee or the employee's 34
	242	+	spouse or domestic partner. 35
	243	+	e. Any other individual related by blood or whose close association with 36
	244	+	the employee is the equivalent of a family relationship. 37
	245	+	(10) Health care provider. – Any person licensed under federal or North Carolina 38
	246	+	law to provide medical or emergency services, including, but not limited to, 39
	247	+	doctors, nurses and emergency room personnel, or certified midwives. 40
	248	+	(11) Next of kin. – As defined in section 101(17) of the Family and Medical Leave 41
	249	+	Act, 29 U.S.C. § 2611(17). 42
	250	+	(12) Qualifying exigency leave. – Leave based on a need arising out of a covered 43
	251	+	individual's family member's active duty service or notice of an impending 44
	252	+	call or order to active duty in the Armed Forces, including, but not limited to, 45
	253	+	providing for the care or other needs of the military member's child or other 46
	254	+	family member, making financial or legal arrangements for the military 47
	255	+	member, attending counseling, attending military events or ceremonies, 48
	256	+	spending time with the military member during a rest and recuperation leave 49
	257	+	or following return from deployment, or making arrangements following the 50
	258	+	death of the military member. 51 General Assembly Of North Carolina Session 2025
	259	+	Page 6 DRH40426-MC-187
	260	+	(13) Retaliatory personnel action. – Denial of any right guaranteed under this 1
	261	+	Chapter, including, but not limited to, any threat, discharge, suspension, 2
	262	+	demotion, reduction of hours, any other adverse action against an employee 3
	263	+	for the exercise of any right guaranteed herein, or reporting or threatening to 4
	264	+	report an employee's suspected citizenship or immigration status or the 5
	265	+	suspected citizenship or immigration status of a family member of the 6
	266	+	employee to a federal, State, or local agency. Retaliatory personnel actions 7
	267	+	shall also include interference with or punishment for in any manner 8
	268	+	participating in or assisting an investigation, proceeding, or hearing under this 9
	269	+	Chapter. 10
	270	+	(14) Serious health condition. – An illness, injury, impairment, pregnancy, 11
	271	+	recovery from childbirth, or physical or mental condition that involves 12
	272	+	inpatient care in a hospital, hospice, or residential medical care facility, or 13
	273	+	continuing treatment by a health care provider. 14
	274	+	(15) State average weekly wage. – The average weekly insured wage as defined in 15
	275	+	G.S. 96-1(b)(2). 16
	276	+	"§ 96A-2. Eligibility for benefits. 17
	277	+	Beginning January 1, 2026, family and medical leave insurance benefits are payable to an 18
	278	+	individual who: 19
	279	+	(1) Meets the definition of "covered individual" as defined by G.S. 96A-1(b)(3); 20
	280	+	and 21
	281	+	(2) Meets one of the following requirements: 22
	282	+	a. Because of birth, adoption, or placement through foster care, is caring 23
	283	+	for a new child during the first year after the birth, adoption, or 24
	284	+	placement of that child; 25
	285	+	b. Is caring for a family member with a serious health condition; 26
	286	+	c. Has a serious health condition; 27
	287	+	d. Is caring for a covered service member who is the covered individual's 28
	288	+	next of kin or other family member; or 29
	289	+	e. Because of any "qualifying exigency leave" arising out of the fact that 30
	290	+	the family member of the covered individual is on active duty (or has 31
	291	+	been notified of an impending call or order to active duty) in the 32
	292	+	Armed Forces. 33
	293	+	"§ 96A-3. Duration of benefits. 34
	294	+	(a) The maximum number of weeks during which family and medical leave insurance 35
	295	+	benefits are payable under G.S. 96A-2(2)c. in an application year is 18 weeks. 36
	296	+	(b) The maximum number of weeks during which family and medical leave insurance 37
	297	+	benefits are payable under G.S. 96A-2(2)a., (2)b., or (2)e. in an application year is 12 weeks. 38
	298	+	(c) The maximum number of weeks during which family and medical leave insurance 39
	299	+	benefits are payable under G.S. 96A-2(2)d. in an application year is 26 weeks. 40
	300	+	(d) The first payment of benefits must be made to an individual within two weeks after 41
	301	+	the claim is filed, and subsequent payments must be made every two weeks thereafter. 42
	302	+	"§ 96A-4. Amount of benefits. 43
	303	+	(a) The amount of family and medical leave insurance benefits shall be determined as 44
	304	+	follows: 45
	305	+	(1) The weekly benefit shall be determined as follows: (i) the portion of the 46
	306	+	covered individual's average weekly wage that is equal to or less than one 47
	307	+	hundred percent (100%) of the State average weekly wage shall be replaced 48
	308	+	at a rate of ninety percent (90%) and (ii) the portion of an employee's or 49
	309	+	self-employed individual's average weekly wage that is more than one 50 General Assembly Of North Carolina Session 2025
	310	+	DRH40426-MC-187 Page 7
	311	+	hundred percent (100%) of the State average weekly wage shall be replaced 1
	312	+	at a rate of fifty percent (50%). 2
	313	+	(2) The maximum benefit shall be one hundred percent (100%) of the statewide 3
	314	+	average weekly wage. 4
	315	+	(3) The minimum weekly benefit shall not be less than one hundred dollars 5
	316	+	($100.00) per week except that if the covered individual's average weekly 6
	317	+	wage is less than one hundred dollars ($100.00) per week, the weekly benefit 7
	318	+	shall be the employee's full wage. 8
	319	+	(4) For purposes of this section, a covered individual's average weekly wage shall 9
	320	+	be the average weekly wage during the 12 months preceding submission of 10
	321	+	the application (or the average weekly wage during the time the covered 11
	322	+	individual worked, if it was less than 12 months). 12
	323	+	(b) Family and medical leave insurance benefits are not payable for less than eight hours 13
	324	+	of family and medical leave taken in one workweek. 14
	325	+	"§ 96A-5. Contributions. 15
	326	+	(a) Payroll contributions shall be authorized in order to finance the payment of benefits 16
	327	+	under the family and medical leave insurance program. 17
	328	+	(b) Beginning on January 1, 2026, for each employee, an employer shall remit to the Paid 18
	329	+	Family and Medical Leave Fund (Fund), established under G.S. 96A-16, contributions in the 19
	330	+	form and manner determined by the Division. Annually, not later than October 1, the Assistant 20
	331	+	Secretary shall fix the contribution rate for the coming calendar year in the manner described in 21
	332	+	this subsection. For calendar years 2026 and 2027, the Assistant Secretary shall do so based on 22
	333	+	sound actuarial principles. For calendar year 2028 and thereafter, the Assistant Secretary shall 23
	334	+	first certify and publish the following information: 24
	335	+	(1) The total amount of family and medical leave insurance benefits paid by the 25
	336	+	Division during the previous fiscal year; 26
	337	+	(2) The total amount remaining in the Fund at the close of the fiscal year; 27
	338	+	(3) The total amount equal to one hundred forty percent (140%) of the previous 28
	339	+	fiscal year's expenditure for family and medical leave insurance benefits paid 29
	340	+	and for the administration of the family and medical leave insurance program; 30
	341	+	(4) The amount by which the total amount remaining in the Fund at the close of 31
	342	+	the previous fiscal year is less than or greater than one hundred forty percent 32
	343	+	(140%) of the previous fiscal year's expenditure for family and medical leave 33
	344	+	insurance benefits paid and for the administration of the family and medical 34
	345	+	leave insurance program; and 35
	346	+	(5) The amount by which the contribution rate shall be adjusted to ensure that the 36
	347	+	Fund shall maintain or achieve an annualized amount of not less than one 37
	348	+	hundred forty percent (140%) of the previous fiscal year's expenditure for 38
	349	+	family and medical leave insurance benefits paid and for the administration of 39
	350	+	the family and medical leave insurance program. The contribution rate 40
	351	+	adjustment, if any, made as the result of the Assistant Secretary's certification 41
	352	+	and report under this subsection shall supersede the rate previously set forth 42
	353	+	and shall become effective on January 1 of the following calendar year. 43
	354	+	(c) A self-employed individual who is electing coverage under G.S. 96A-13 shall be 44
	355	+	responsible for the employee's share of contributions set forth in subsection (b) of this section on 45
	356	+	that individual's income from self-employment. 46
	357	+	(d) An employer shall not deduct more than fifty percent (50%) of the contribution 47
	358	+	required for an employee by subsection (b) of this section from that employee's wages and shall 48
	359	+	remit the full contribution required under said subsection to the Fund. 49
	360	+	"§ 96A-6. Reduced leave schedule. 50 General Assembly Of North Carolina Session 2025
	361	+	Page 8 DRH40426-MC-187
359	362		(a) A covered individual shall be entitled, at the option of the covered individual, to take 1
360	363		paid family and medical leave on an intermittent or reduced leave schedule in which all of the 2
361	364		leave authorized under this Chapter is not taken sequentially. Family and medical leave insurance 3
362	365		benefits for intermittent or reduced leave schedules shall be prorated. 4
363	366		(b) The covered individual shall make a reasonable effort to schedule paid family and 5
364	367		medical leave under this section so as not to unduly disrupt the operations of the employer. The 6
365	368		covered individual shall provide the employer with prior notice of the schedule on which the 7
366	369		covered individual will take the leave, to the extent practicable. Paid family and medical leave 8
367	370		taken under this section shall not result in a reduction of the total amount of leave to which an 9
368	371		employee is entitled beyond the amount of leave actually taken. 10
369	372		(c) Nothing in this section shall be construed to entitle a covered individual to more leave 11
370	373		than required under G.S. 96A-3. 12
371	374		"§ 96A-7. Leave and employment protection. 13
372	375		(a) Any covered individual who exercises his or her right to family and medical leave 14
373	376		insurance benefits shall, upon the expiration of that leave, be entitled to be restored by the 15
374	377		employer to the position held by the covered individual when the leave commenced, or to a 16
375	378		position with equivalent seniority, status, employment benefits, pay, and other terms and 17
376	379		conditions of employment, including fringe benefits and service credits that the covered 18
377	380		individual had been entitled to at the commencement of leave. 19
378	381		(b) During any leave taken pursuant to G.S. 96A-2, the employer shall maintain any 20
379	382		health care benefits the covered individual had prior to taking such leave for the duration of the 21
380	383		leave as if the covered individual had continued in employment continuously from the date he or 22
381	384		she commenced the leave until the date the family and medical leave insurance benefits 23
382	385		terminate; provided, however, that the covered individual shall continue to pay the covered 24
383	386		individual's share of the cost of health benefits as required prior to the commencement of the 25
384	387		leave. 26
385	388		(c) Any employer who violates this section or G.S. 96A-8 shall be liable to any eligible 27
386	389		employee affected as follows: 28
387	390		(1) For damages equal to the amount of (i) any wages, salary, employment 29
388	391		benefits, or other compensation denied or lost to such employee by reason of 30
389	392		the violation, or (ii) in a case in which wages, salary, employment benefits, or 31
390	393		other compensation have not been denied or lost to the employee, any actual 32
391	394		monetary losses sustained by the employee as a direct result of the violation, 33
392	395		such as the cost of providing care, up to a sum equal to 12 weeks of wages or 34
393	396		salary for the employee, (iii) the interest on the amount described in clause (i) 35
394	397		of this subdivision calculated at the prevailing rate, and (iv) an additional 36
395	398		amount as liquidated damages equal to the sum of the amount described in 37
396	399		clause (i) of this subdivision and the interest described in clause (ii) of this 38
397	400		subdivision, except that if an employer who has violated this section or 39
398	401		G.S. 96A-8 proves to the satisfaction of the court that the act or omission 40
399	402		which violated the section was in good faith and that the employer had 41
400	403		reasonable grounds for believing that the act or omission was not a violation, 42
401	404		the court may, in the discretion of the court, reduce the amount of the liability 43
402	405		to the amount and interest determined under clauses (i) and (ii) of this 44
403	406		subdivision, respectively. 45
404	407		(2) For such equitable relief as may be appropriate, including employment, 46
405	408		reinstatement, and promotion. 47
406	409		(d) An action to recover the damages or equitable relief prescribed in subsection (c) of 48
407	410		this section may be maintained against any employer (including a public agency) in any federal 49
408	411		or State court of competent jurisdiction by any one or more employees for and on behalf of the 50
409	412		employees or the employees and other employees similarly situated. 51 General Assembly Of North Carolina Session 2025
410		-	~~House Bill 786-First Edition~~ Page 9
	413	+	DRH40426-MC-187 Page 9
411	414		(e) The court in such an action shall, in addition to any judgment awarded to the plaintiff, 1
412	415		allow a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to 2
413	416		be paid by the defendant. 3
414	417		(f) Except as provided by subsection (g) of this section, an action may be brought under 4
415	418		this section not later than two years after the date of the last event constituting the alleged 5
416	419		violation for which the action is brought. 6
417	420		(g) In the case of an action brought for a willful violation of this section or G.S. 96A-8, 7
418	421		the action may be brought within three years of the date of the last event constituting the alleged 8
419	422		violation for which such action is brought. 9
420	423		"§ 96A-8. Retaliatory personnel actions prohibited. 10
421	424		(a) It shall be unlawful for an employer or any other person to interfere with, restrain, 11
422	425		deny the exercise of, or the attempt to exercise any right protected under this Chapter. 12
423	426		(b) An employer, temporary help company, employment agency, employee organization, 13
424	427		or other person shall not take retaliatory personnel action or otherwise discriminate against a 14
425	428		person because he or she exercised rights protected under this Chapter. Such rights include, but 15
426	429		are not limited to, the right to request, file for, apply for, or use benefits provided for under this 16
427	430		Chapter; to take leave from work under this Chapter; communicate to the employer or any other 17
428	431		person or entity an intent to file a claim, a complaint with the Division or courts, or an appeal; or 18
429	432		has testified or is about to testify or has assisted in any investigation, hearing, or proceeding under 19
430	433		this Chapter, at any time, including during the period in which the person receives family and 20
431	434		medical leave insurance benefits under this Chapter; inform any person about any employer's 21
432	435		alleged violation of this Chapter; and the right to inform any person of his or her rights under this 22
433	436		Chapter. 23
434	437		(c) It shall be unlawful for an employer's absence control policy to count paid family and 24
435	438		medical leave taken under this Chapter as an absence that may lead to or result in discipline, 25
436	439		discharge, demotion, suspension, or any other adverse action. 26
437	440		(d) Protections of this section shall apply to any person who mistakenly, but in good faith, 27
438	441		alleges violations of this Chapter. 28
439	442		(e) This section shall be enforced as provided in subsections (c) through (g) of 29
440	443		G.S. 96A-7. 30
441	444		"§ 96A-9. Coordination of benefits. 31
442	445		(a) Leave taken with wage replacement under this Chapter that also qualifies as leave 32
443	446		under the Family and Medical Leave Act shall run concurrently with leave taken under the 33
444	447		Family and Medical Leave Act. 34
445	448		(b) An employer may require that payment made pursuant to this Chapter be made 35
446	449		concurrently or otherwise coordinated with payment made or leave allowed under the terms of 36
447	450		disability or family care leave under a collective bargaining agreement or employer policy. The 37
448	451		employer must give employees written notice of this requirement. 38
449	452		(c) This Chapter does not diminish an employer's obligation to comply with any of the 39
450	453		following that provide more generous leave: 40
451	454		(1) A collective bargaining agreement; 41
452	455		(2) An employer policy; or 42
453	456		(3) Any law. 43
454	457		(d) An individual's right to leave under this Chapter may not be diminished by a collective 44
455	458		bargaining agreement entered into or renewed, or an employer policy adopted or retained, after 45
456	459		the effective date of this Chapter. Any agreement by an individual to waive his or her rights under 46
457	460		this Chapter is void as against public policy. 47
458	461		"§ 96A-10. Notice. 48
459	462		(a) Each employer shall provide written notice to each employee upon hiring and 49
460	463		annually thereafter. An employer shall also provide written notice to an employee when the 50
461	464		employee requests leave under this Chapter or when the employer acquires knowledge that an 51 General Assembly Of North Carolina Session 2025
462		-	Page 10 ~~House Bill 786-First Edition~~
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463	466		employee's leave may be for a qualifying reason under G.S. 96A-2. Such notice shall include (i) 1
464	467		the employee's right to family and medical leave insurance benefits under this Chapter and the 2
465	468		terms under which it may be used, (ii) the amount of family and medical leave insurance benefits, 3
466	469		(iii) the procedure for filing a claim for benefits, (iv) the right to job protection and benefits 4
467	470		continuation under G.S. 96A-7, (v) that discrimination and retaliatory personnel actions against 5
468	471		a person for requesting, applying for, or using family and medical leave insurance benefits is 6
469	472		prohibited under G.S. 96A-8, and (vi) that the employee has a right to file a complaint for 7
470	473		violations of this Chapter. An employer shall also display and maintain a poster in a conspicuous 8
471	474		place accessible to employees at the employer's place of business that contains the information 9
472	475		required by this section in English, Spanish, and any language that is the first language spoken 10
473	476		by at least five percent (5%) of the employer's workforce, provided that such notice has been 11
474	477		provided by the Division. The Assistant Secretary may adopt regulations to establish additional 12
475	478		requirements concerning the means by which employers shall provide such notice. 13
476	479		(b) Employees shall provide notice to their employers as soon as practicable of their 14
477	480		intention to take leave under this Chapter. 15
478	481		"§ 96A-11. Enforcement. 16
479	482		(a) The Assistant Secretary shall establish a system for appeals in the case of a denial of 17
480	483		family and medical leave insurance benefits. In establishing such system, the Assistant Secretary 18
481	484		may utilize any and all procedures and appeals mechanisms established under G.S. 96-15. 19
482	485		(b) Judicial review of any decision with respect to family and medical leave insurance 20
483	486		benefits shall be permitted in a court of competent jurisdiction after a party aggrieved thereby 21
484	487		has exhausted all administrative remedies established by the Assistant Secretary. 22
485	488		(c) The Assistant Secretary shall implement procedures to ensure confidentiality of all 23
486	489		information related to any claims filed or appeals taken to the maximum extent permitted by 24
487	490		applicable laws. 25
488	491		"§ 96A-12. Erroneous payments and disqualification for benefits. 26
489	492		(a) A covered individual is disqualified from family and medical leave insurance benefits 27
490	493		for one year if the individual is determined by the Assistant Secretary to have willfully made a 28
491	494		false statement or misrepresentation regarding a material fact or willfully failed to report a 29
492	495		material fact to obtain benefits under this Chapter. 30
493	496		(b) If family and medical leave insurance benefits are paid erroneously or as a result of 31
494	497		willful misrepresentation, or if a claim for family and medical leave insurance benefits is rejected 32
495	498		after benefits are paid, the Division may seek repayment of benefits from the recipient. The 33
496	499		Assistant Secretary shall exercise his or her discretion to waive, in whole or in part, the amount 34
497	500		of any such payments where the recovery would be against equity and good conscience. 35
498	501		"§ 96A-13. Elective coverage. 36
499	502		(a) A self-employed person, including a sole proprietor, partner, or joint venturer, may 37
500	503		elect coverage under this Chapter for an initial period of not less than three years. The 38
501	504		self-employed person must file a notice of election in writing with the Assistant Secretary, as 39
502	505		required by the Division. The election becomes effective on the date of filing the notice. As a 40
503	506		condition of election, the self-employed person must agree to supply any information concerning 41
504	507		income that the Division deems necessary. 42
505	508		(b) A self-employed person who has elected coverage may withdraw from coverage 43
506	509		within 30 days after the end of the three-year period of coverage, or at such other times as the 44
507	510		Assistant Secretary may prescribe by rule, by filing written notice with the Assistant Secretary, 45
508	511		such withdrawal to take effect not sooner than 30 days after filing the notice. 46
509	512		"§ 96A-14. Family and medical leave insurance program. 47
510	513		(a) The Division shall establish and administer a family and medical leave insurance 48
511	514		program and begin collecting contributions as specified in this Chapter. By January 1, 2027, the 49
512	515		Division shall start receiving claims from and paying family and medical leave insurance benefits 50
513	516		to covered individuals. 51 General Assembly Of North Carolina Session 2025
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515	518		(b) The Division shall establish reasonable procedures and forms for filing claims for 1
516	519		benefits under this Chapter and shall specify what supporting documentation is necessary to 2
517	520		support a claim for benefits, including any documentation required from a health care provider 3
518	521		for proof of a serious health condition. 4
519	522		(c) The Division shall notify the employer within five business days of a claim being 5
520	523		filed pursuant to this Chapter. 6
521	524		(d) The Division shall use information sharing and integration technology to facilitate the 7
522	525		disclosure of relevant information or records, so long as an individual consents to the disclosure 8
523	526		as required under State law. 9
524	527		(e) Information contained in the files and records pertaining to an individual under this 10
525	528		Chapter are confidential and not open to public inspection other than to public employees in the 11
526	529		performance of their official duties. However, the individual or an authorized representative of 12
527	530		an individual may review the records or receive specific information from the records upon the 13
528	531		presentation of the individual's signed authorization. 14
529	532		(f) The Department of Commerce shall adopt rules as necessary to implement this 15
530	533		Chapter. 16
531	534		"§ 96A-15. Federal income tax. 17
532	535		If the Internal Revenue Service determines that family and medical leave insurance benefits 18
533	536		under this Chapter are subject to federal income tax, the Division must advise an individual filing 19
534	537		a new claim for family and medical leave insurance benefits, at the time of filing such claim, that 20
535	538		the Internal Revenue Service has determined that benefits are subject to federal income tax and 21
536	539		that requirements exist pertaining to estimated tax payments. 22
537	540		"§ 96A-16. Family and medical leave insurance account fund; establishment and 23
538	541		investment. 24
539	542		(a) The Paid Family and Medical Leave Fund (Fund) is created in the custody of the 25
540	543		Division. Expenditures from the Fund may be used only for the purposes of the family and 26
541	544		medical leave insurance benefits program. Only the Assistant Secretary of the Division or the 27
542	545		Assistant Secretary's designee may authorize expenditures from the Fund. 28
543	546		(b) Whenever, in the judgment of the Division, there shall be in the Fund an amount of 29
544	547		funds in excess of that amount deemed by the Division to be sufficient to meet the current 30
545	548		expenditures properly payable therefrom, the Division shall have full power to invest, reinvest, 31
546	549		manage, contract, sell, or exchange investments acquired with such excess funds in the manner 32
547	550		prescribed by North Carolina law. 33
548	551		"§ 96A-17. Employer Grant Fund. 34
549	552		There is created in the Department of Commerce the Employer Grant Fund to offset the costs 35
550	553		of the program for employers that demonstrate the need for financial assistance in meeting the 36
551	554		requirements of this Chapter. The Employer Grant Fund shall consist of appropriations from the 37
552	555		General Fund. Donations from public agencies and private sources may be accepted if the 38
553	556		donations are unconditional and unrestricted. The Department of Commerce shall adopt rules for 39
554	557		the administration of the grant funds. 40
555	558		"§ 96A-18. Reports. 41
556	559		Beginning January 1, 2028, the Division shall report to the General Assembly by April 1 of 42
557	560		each year on projected and actual program participation by purpose listed in G.S. 96A-2, gender 43
558	561		of beneficiary, premium rates, fund balances, outreach efforts, and, for leaves taken under 44
559	562		G.S. 96A-2, family members for whom leave was taken to provide care. 45
560	563		"§ 96A-19. Public education. 46
561	564		The Division shall conduct a public education campaign to inform workers and employers 47
562	565		regarding the availability of family and medical leave insurance benefits. Outreach information 48
563	566		shall be available in English, Spanish, French, German, Vietnamese, Chinese, Arabic, Korean, 49
564	567		Tagalog, Hindi, Gujarati, Russian, Hmong, and other languages spoken by more than five percent 50
565	568		(5%) of the State's population. 51 General Assembly Of North Carolina Session 2025
566		-	Page 12 ~~House Bill 786-First Edition~~
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567	570		"§ 96A-20. Sharing technology. 1
568	571		The Division is encouraged to use State data collection and technology to the extent possible 2
569	572		and to integrate the program with existing State policies. 3
570	573		"§ 96A-21. Severability. 4
571	574		If any provision of this Chapter or its application to any person or circumstance is held 5
572	575		invalid, the remainder of the Chapter or the application of the provision to other persons or 6
573	576		circumstances is not affected." 7
574	577		SECTION 6.1.(b) All rules necessary for implementation of this section shall be 8
575	578		adopted by October 1, 2025. 9
576	579		SECTION 6.1.(c) There is appropriated from the General Fund to the Department 10
577	580		of Commerce, Employer Grant Fund, the sum of nineteen million dollars ($19,000,000) for the 11
578	581		2025-2026 fiscal year and the sum of thirty million dollars ($30,000,000) in the 2026-2027 fiscal 12
579	582		year to offset employer costs of the Paid Family Medical Leave Act as enacted by this section. 13
580	583		SECTION 6.1.(d) This section becomes effective July 1, 2025. 14
581	584		15
582	585		EFFECTIVE DATE 16
583	586		SECTION 7.1. Except as otherwise provided, this act is effective when it becomes 17
584	587		law. 18