Part I.

Effective October 1, 2026, repeals GS Chapter 126, North Carolina Human Resources Act, and enacts new GS Chapter 126A, Public Workforce Modernization Act instead. The new Chapter consists of Articles on the following topics:

• Article 1, Human Resources System Goals and Definitions
• Article 2, Oversight of the State Human Resources System
• Article 3, Classification and Minimum Qualifications
• Article 4, Compensation
• Article 5, Recruitment and Hiring
• Article 6, Verification and Onboarding
• Article 7, Benefits, Terms, and Conditions of Employment
• Article 8, Just Cause, Disciplinary Actions, and Grievances
• Article 9, Separation, Offboarding, and Reductions in Force
• Article 10, Inappropriate Political Activity
• Article 11, Temporary Employees
• Article 12, Local Discretion as to Local Government Employees
• Article 13, Executive Branch State Employees Workplace Requirements Program for Safety, Health, and Workers’ Compensation
• Article 14, Protection for Reporting Improper Government Activities
• Article 15, Equal Employment and Compensation Opportunity
• Article 16, The Privacy of State Employee Personnel Records
• Article 17, Exemptions from the Public Employment Modernization Act

Part II.

Makes conforming changes by updating statutory cross-references in: GS 95-127(3) (classified service); GS 115C-21(a)(1) (administrative duties of the Superintendent of the Department of Public Instruction); GS 115C-64.28(b) (superintendent staff); GS 115C-238.68(8) (paid parental leave for teachers); GS 115C-268.1(g)(staff of the Professional Educator Preparation and Standards Commission); GS 115C-407.61(a)(6) (memorandum of understanding requirements pertaining to the Superintendent); GS 120-86.1 (personnel-related action unethical); GS 122C-121(a1) (area director under the Mental Health, Developmental Disabilities, and Substance Abuse Act of 1985-Act); GS 122C-154 (personnel under the direct supervision of an area director under the Act); GS 122C-156(a) (area authority salary plans); GS 122C-191(b) (requiring area authorities and state facilities under the Act to comply with specified rules); GS 122C-270(f) (attorneys assigned to facilities for the mentally ill); GS 128-24(6) (intergovernmental exchanges of personnel); GS 135-3(c) (intergovernmental exchanges of personnel); GS 135-48.23(c1) (State Treasurer staff); GS 143-202.4 (Roanoke Island Festival Park staff); GS 143-554(a) (state local educational entity employees’ rights of appeal); GS 143-728(e) (NCInnovation); GS 143-747(a1) (Council of Internal Auditing); GS 143B-53.2(c) (pertaining to employees of the Department of Natural and Cultural Resources); GS 143B-168.12(a)(2) (NC Partnership and local partnerships); GS 143B-168.14(a)(2) (NC Partnership and local partnerships); GS 143B-431.01(j) (Department of Commerce contractors); GS 143B-1209.11(f) (criminal background checks for employees and volunteers of schools within the Department of Health and Human Services); GS 150B-23(a) (contested case provisions of the APA); GS 150B-25.1 (burdens in contested cases); and GS 150B-33(b)(11) (attorneys’ fees in contested cases).

Updates references to the “State Merit System of Personnel Administration” to the “State Merit System of Human Resources” in GS 95-127(3).

Effective October 1, 2026.

Part III.

Directs that the provisions of GS Chapter 126 as they existed immediately prior to its repeal will continue to govern the following five matters:

1. Any contested case pending before the State Human Resources Commission or the Office of Administrative Hearings on the effective date of the Public Workforce Modernization Act (PWMA) as enacted by the act, including any judicial review of such a case pending in the General Court of Justice.
2. Any grievance, disciplinary action, or appeal initiated under GS Chapter 126 prior to the effective date of the PWMA and not finally resolved as of that date.
3. Any claim for back pay, reinstatement, or other relief arising from employment actions that occurred prior to the effective date the PWMA.
4. Any right to career State employee status vested under GS 126-1.1 prior to the effective date of the PWMA.
5. Any cause of action arising under GS Chapter 126 that accrued prior to the effective date of the PWMA, regardless of when suit or administrative action is initiated.

Clarifies that the following occurs on the PWMA’s effective date: (1) the extension of the probationary period authorized in GS 126A-34(a)(2) will only apply to employees hired on or after the effective date; (2) any employee designated as a confidential assistant or confidential secretary under former GS 126-5(c)(2) is automatically redesignated as a confidential assistant under GS 126A-176(a)(1); any employee designated as an exempt warden under former GS 126-5(c17) or GS 126-5(c18) is automatically redesignated as an exempt warden under GS 126A-177(a)(2); and (4) the provisions of GS 126A-174 will only apply to employees hired on or after the effective date.

Clarifies that if a provision of new GS Chapter 126A conflicts with an existing rule in Title 25, Chapter 01 of the North Carolina Administrative Code (Code), new GS Chapter 126A prevails. Clarifies that this doesn’t repeal any rule by provision of this act. Instructs the Office of State Human Resources to submit a revised disciplinary policy to the State Human Resources Commission (Commission) and the Governor. Requires the Commission to adopt the revised policy within 180 days after the effective date of new GS Chapter 16A, subject to the approval of the Governor. Instructs the Commission to repeal any rules in the Code that are unnecessary after the enactment of the act.

Specifies that all decentralization agreements, delegation agreements, and memoranda of understanding between the Office of State Human Resources (Office) and any agency, department, or institution in effect on the effective of the PWMA remains in effect until modified or terminated in accordance with their terms or superseded by agreements executed under the authority of GS Chapter 126A.

Specifies that no action or proceeding brought by or against the Commission or the Office, or against the State concerning either, that is pending on the effective date of the PWMA will be abated, suspended, or otherwise affected by the enactment of that act. Any such action or proceeding will be prosecuted or defended under the law applicable at the time the action or proceeding was  initiated, provided that nothing herein will preclude any party from citing provisions for persuasive guidance where the language of GS Chapter 126A and former GS Chapter 126 is identical or substantially identical.

Directs the Office to assess the State’s classification and compensation system and identify opportunities for improvement, consulting with agencies and outside experts as needed. Requires the Office to report its findings and recommendations to the specified NCGA committees and division by October 1, 2027. Starting March 1, 2027, and annually thereafter, requires each executive branch State agency to report the specified information on the top five job classifications most difficult to recruit and retain during the prior fiscal year. Instructs the Office to incorporate trends and recommended legislation to the annual State of the State Workforce Report. Directs the Office to contemplate executing a pilot on classification and compensation recommendations in one or more executive branch agencies that volunteer to participate, following the initial assessment and review of agency data. Requires the Office to submit a revised disciplinary policy to the Commission and Governor by December 1, 2026. Directs the Commission to adopt that policy, subject to the Governor’s approval, by April 1, 2027.

Effective October 1, 2026.

Part IV.  

Effective July 1, 2026, appropriates $1.4 million from the General Fund to the Commission for 2026-27 to provide funding for up to six time-limited positions, and resources required, to implement the changes to the State human resources system created by the act. Limits use of the funds to the six enumerated purposes, including resources required to update State-wide policies and review rules, training for agency leadership, human resources division staff, and hiring managers, and technical assistance. Requires the Office to report on the use of the funds each June 1 and December 1 to the specified NCGA committees and division.