House committee substitute to the 1st edition makes the following changes.

Adds the following content and amends the act’s titles.

Section 2

Enacts new GS 126-14.3A requiring the Office of State Human Resources (OSHR) to streamline the job application process for State positions by allowing applicants to upload resumes or website profiles, using an electronic tool to import information from these documents into the job application format. Allows agencies to collect additional information that is not typically found on resumes and that is not needed for initial screening, later in the process. Requires OSHR to annually, beginning in 2026, present the State application form and demonstrate the import process to the State Human Resources Commission (Commission) to receive its feedback. Amends GS 126-5 to provide that except as to policies, rules, and plans established by the Commission under new GS 126-14.3A, in addition to those already listed statutes, and except as to GS 126-3.1 (employing agency flexibility), and GS 126-14.3B (hiring candidate from most qualified pool in previous posting), in addition to the already listed statutes, GS Chapter 126 does not apply to exempt managerial positions, a warden of an adult corrections facility, or to the warden of a State adult correctional facility.

Requires OSHR to modify the State job application process according to the above, by November 1, 2025.

Section 3

Amends GS 126-14.2 to make it State policy that State departments, agencies, and institutions should simplify job postings to make it easy for potential applicants to reach the postings, understand essential qualifications and management preferences, and then apply. Requires approval of the agency head for a vacancy to add more than five knowledge, skills, and abilities to the class specification of the vacancy being filled. Defines essential qualifications.

Section 4

Amends GS 126-14.3 to require the Commission to adopt policies to require that a closing date be posted for each job opening, unless employing agency, department, office, board, commission, system, or institution has approved an exception for critical classifications (was, unless an exception for critical classifications has been approved by the Commission or as a special exception through OSHR).

Specifies that unless the employing agency, department, office, board, commission, system, or institution determines otherwise, exceptions for critical classifications remain in effect if they were previously granted by the Commission or OSHR.

Section 5

Enacts new GS 126-3.1 giving employing agencies (Council of State, State agencies in the executive branch, Community Colleges System Office, and UNC) flexibility to: (1) offer qualified applicants the option to have their applications considered for future positions at the same agency and at other agencies within the same or comparable classification; (2) allow agencies to recruit and hire applicants from job postings that apply to all vacancies in a particular classification across all State agencies; (3) classify or reclassify positions according to the Commission classification system, provided employees meet the minimum requirements for the classification; and (4) establish employee salaries within Commission determined salary ranges for respective position classifications. Effective July 1, 2025.

Section 6

Enacts new GS 126-6.4 allowing the Council of State, executive branch agencies, Community Colleges System Office, and UNC to directly hire temporary employees into vacant positions if: (1) the permanent position to be filled must be vacant; (2) the temporary employee must have worked for a minimum of six months in a substantially equivalent role with satisfactory performance (this excludes any mandatory breaks); (3) the temporary employee must meet the minimum education and experience requirements established for the position classification, and the employee's salary must be set within the approved classification range (may be waived by the Director of OSHR); and (4) the temporary employee must have been originally hired through the North Carolina Office of State Human Resources Temporary Solutions Program or directly hired by a State agency as a temporary State employee. Exempts these hirings from GS Chapter 126, but this exemption for the hiring process does not affect whether the position is subject to the Chapter once the employee is hired. Specifies that the hiring is not exempt from GS 126-14 (concerning a promise or threat to obtain political contribution or support), GS 126-14.1 (concerning a threat to obtain political contribution or support), or GS 126-14.5 (compelled speech prohibited) or from Articles 6 (Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment) or 7 (The Privacy of State Employee Personnel Records) of this Chapter.

Section 7

Enacts new GS 126-14.3B allowing the Council of State, the executive branch agencies, the Community Colleges System Office, and UNC to directly hire, without posting, into a vacant position so long: (1) that employer previously posted for recruitment a position that has the same or comparable classification as the position that is now vacant; (2) the person who is now being hired applied for that previous vacancy; (3) the employer selected the person to be within the pool of the most qualified persons for the previous vacancy, but did not hire that person; and (4) for the position that is now vacant, the person who is now being hired meets the minimum education and experience requirements for the classification and has a salary set within the vacant position's classification range. Exempts the hiring from GS Chapter 126 but specifies that it is not exempt from GS 126-14, GS 126-14.1, GS 126-14.5, and Articles 6 and 7 of this Chapter. Specifies that this exemption from this Chapter for the hiring process does not affect whether the position is subject to this Chapter once hired.

Section 8

Requires OSHR to submit to the Commission and Governor an improved process for performance management. Requires the Commission, subject to the Governor’s approval, to adopt a new performance management and performance evaluation policy by March 15, 2026. Repeals the Commission’s existing rules on performance management and performance evaluation when this act becomes law.

Section 9

Enacts new GS 126-11.1 to allow local entities, for positions subject to GS Chapter 126, to provide an employment preference to eligible veterans and eligible members of the National Guard.

Section 10

Enacts new GS 126-11.2 to allow local entities to offer sign-on and retention bonuses to employees subject to GS Chapter 126, which must be consistent with Sign-On and Retention Bonus Policy for State agency employees.

Section 11

Amends GS 150B-2, by excluding from the definition of a rule, job classification standards, job qualifications, salaries, and policies established for State and local government positions under the jurisdiction of the Commission, so long as those standards, qualifications, salaries, and policies directly affect only applicants for employment, current employees, or the resolution of matters related to past employment (was, job classification standards, job qualifications, and salaries established for positions under the Commission).

Section 12

Requires OSHR, by March 15, 2026, to report to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Fiscal Research Division with recommended changes to GS Chapter 126 to modernize the North Carolina Human Resources Act, simplify its provisions, and align it with contemporary human resources best practices. Sets out four areas where legislative changes are needed that must be included, at a minimum, in the report, including developing and maintaining a high-quality, well-trained State workforce, and improving State employee retention rates. Requires collaborating with State agencies, local governments, and other relevant stakeholders to develop these legislative proposals.

Section 13

Requires the Commission to repeal or amend its rules to make changes that are consistent with this act, using temporary rulemaking where necessary.