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  • Summary date: Mar 30 2023 - View Summary

    Section 1.1

    Titles the act as the "Economic Security Act of 2023."

    Amends GS 95-25.3(a) to delete the provision requiring wages of at least $6.15 per hour. Replaces deleted text with a provision requiring a minimum wage of (1) $8.00 per hour, effective Labor Day, September 4, 2023; (2) $9.50 per hour, effective Labor Day, September 2, 2024; (3) $11.00 per hour, effective Labor Day, September 1, 2025; (4) $13.00 per hour, effective Labor Day, September 7, 2026; and (5) $15.00 per hour, effective Labor Day, September 6, 2027. Each of the provisions states that if the minimum wage in the federal Fair Labor Standards Act is higher than the stated new minimum wage, that the rate specified in the Fair Labor Standards Act is the state minimum wage.

    Section 1.2

    Enacts Article 2B, entitled Equal Pay Act, to GS Chapter 95 as follows.

    Enacts GS 95-25.27 to establish that no employer can pay any person in the employer's employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for the same quantity and quality of the same classification of work. Establishes that any employer who violates the statute is liable to the employee affected in the amount of the wages that the employee is deprived of by reason of the violation. Defines employer to include the state and any local political subdivision of the state and every person having control or direction of any woman or man employed at any labor, or responsible directly or indirectly for the wages of another who employs more than five employees. Defines an employee as any person in receipt of or entitled to compensation for labor performed for another. 

    Establishes that nothing in the statute prohibits a variation of rates of pay for employees engaged in the same classification of work based upon seniority; a difference in length of service; ability; skill; difference in duties or services performed, whether regularly or occasionally; difference in the shift or time of day worked; hours of work; or restrictions or prohibitions on lifting or moving objects in excess of specified weight or other reasonable differentiation; or factor or factors other than sex, when exercised in good faith.

    Bars an employer who is in violation of the statute from reducing the pay of any employee in order to bring the employer into compliance with Article 2B. Bars an employer from retaliating against any employee who seeks redress pursuant to Article 2B or who participates in the investigation of a complaint under Article 2B.

    Enacts GS 95-25.28, which allows an affected employee to file a complaint with the Department of Labor (Department) and requires the Department to investigate the complaint and notify the employer and the employee of the results of the investigation. Allows an employee receiving less than the wage to which the employee is entitled under the statute to recover in a civil action the balance of those wages, together with costs and attorneys' fees, notwithstanding any agreement to work for a lesser wage. Provides that the employee is not required to exhaust administrative remedies before filing the civil action. Establishes that a civil action pursuant to the statute is to be instituted within two years after the date that the alleged violation is discovered by the affected employee.

    Section 1.3

    Enacts new Article 3A of GS Chapter 95, to be cited as the Healthy Families and Healthy Workplaces Act (HFHW Act). Denotes that state public policy in promoting the general welfare of the people of North Carolina requires the enactment of new Article 3A under the police power of the state.

    Provides definitions for the following terms as used in the HFHW Act: child, domestic violence, employee, employ, employer, health care provider, immediate family member, parent, paid sick time or paid sick days, sexual assault, stalking, and small business.

    Provides that the proposed HFHW Act does not apply to (1) bona fide volunteers in an organization where an employer-employee relationship does not exist or (2) any person who is exempt from the Wage and Hour Act under GS 95-25.14(a)(2) through (8), GS 95-25.14(b), GS 95-25.14 (b1), GS 95-25.14(c), and GS 95-25.14(e). Makes an exception regarding domestic workers, providing that they are exempt only if they are employed in the place of residence of their employer.

    Provides that paid sick time begins to accrue at the start of employment at a rate of one hour of paid sick time for every 30 hours worked. Provides additional guidelines regarding discretionary advancement of sick time by the employer, limits on the amount of paid sick time accrued and the accrual of paid sick time when there is a separation of employment followed by a rehiring by the same employer. Provides that with the exception of the specified exemptions to the proposed HFHW Act, any employee who works in North Carolina and who must be absent from work for the reasons delineated in proposed new GS 95-31.5(a) is entitled to paid sick time.  

    Directs that paid sick time is to be provided by an employer to an employee who meets any of the following reasons listed in proposed new GS 95-31.5: (1) to care for the employee's immediate family member who is suffering from a physical or mental illness, injury, or medical condition that requires care, professional medical diagnosis or care, preventive medical care, or a routine medical appointment, (2) to care for the employee's own physical or mental illness, injury, or medical condition that requires care, professional medical diagnosis or care, preventive medical care, or a routine medical appointment, or (3) absence necessary due to circumstances resulting from the employee, or a family member of the employee, being a victim of stalking or domestic or sexual violence, if the leave is to allow the employee to obtain for the employee or the family member medical attention, victims services, counseling, relocation, or legal services. Permits the employer to require certification of the qualifying health issue or event when a paid sick time period covers more than three consecutive work days. Provides guidelines for determining what may be deemed acceptable certification. Provides that an employer may not require certification from a health care provider that is employed by the employer. Prohibits an employer from requiring the disclosure of details relating to domestic violence, sexual assault, stalking, or an employee's medical condition as a condition of providing paid sick time to an employee. Directs an employer to treat as confidential any information that the employer acquires about the employee or the employee's immediate family regarding domestic violence, sexual assault, stalking, or health conditions. Prohibits the employer from requiring an employee to secure a replacement worker as a condition of providing sick time under the proposed HFHW Act. Prohibits counting paid sick time taken under the Article as an absence that may result in a retaliatory or adverse action. Directs the employee to make a good faith effort, when the use of paid sick time is foreseeable, to provide the employer with advance notice. States that this Article provides minimum requirements regarding paid sick time and should not be construed to limit, preempt, or otherwise affect other applicability of law, regulation, or policy that extends additional or greater protections to employees, nor should this proposed act be construed to discourage employers from adopting more generous paid sick time policies. Provides that employers already offering a paid sick time policy do not have to modify that policy providing that the paid sick time policy currently in place offers an employee, at his or her discretion, the option to take paid sick time that is equivalent to the amount and for the same purposes offered under the proposed HFHW Act.

    Requires employers to provide notice to employees, in Spanish and English, of their entitlement to paid sick time as well as other related information. Notice may be provided by supplying each employee with a notice in Spanish and English or by conspicuously displaying a poster in the place of employment in both languages. Prohibits employers from retaliating against employees who request or use paid sick time. Provides that an employee has a right to file a complaint with the Commissioner of Labor (Commissioner) or in the General Court of Justice if an employer (1) denies an employee paid sick time or (2) retaliates against an employee for requesting or taking paid sick time.

    Authorizes the Commissioner to enforce and administer the provisions of the proposed HFHW Act. Provides criteria regarding employer's liability for a violation under the proposed HFHW Act, including provisions for the potential awarding of liquidated damages for a violation of the act. Directs that actions under the proposed HFHW Act must be brought within two years pursuant to GS 1-53. Also provides that the rights and remedies created under the HFHW Act are supplementary to all existing common law and statutory rights and remedies. Directs the Commissioner to adopt rules to implement the proposed act. Provides that the provisions of the proposed Article are severable.

    Makes conforming changes to GS 95-241(a).

    Effective January 1, 2024, and applies only to covered employment on or after that date. Specifies that with respect to employees covered by a valid collective bargaining agreement in effect on January 1, 2024, this section does not apply until the expiration date in the collective bargaining agreement; however, this section applies upon any such agreement's renewal, extension, amendment, or modification in any respect after January 1, 2024.

    Section 1.4

    Amends the labor laws of North Carolina to reduce the amount of tips that may be counted as wages of tipped employees through December 31, 2023, and subsequently requires that no tips may be counted as wages.

    Section 1.5

    Amends GS 95-25.2 modifying the format of the definitions section and adding subsection (5a) defining employment status, subsection (8a) defining intentional, and subsection (16a) defining willful. Makes technical changes.

    Amends GS 95-25.13(1) requiring only written notification to employees at the time of hiring and upon any material change of (1) the promised wages and basis upon which wages will be calculated; (2) the method, day, and place for payment; (3) the full name, mailing address, and telephone number of the employer and the federal and state tax identification number of each employer who is not a natural person; and (4) the employment status of the employee.

    Amends GS 95-25.22 requiring the court to award liquidated damages in an amount equal to twice the amount found to be due to an employee when the employer has violated provisions relating to minimum wage, overtime, or wage payment unless the employer shows the act or omission constituting a violation was in good faith and the employer had reasonable grounds for believing the act or omission was not a violation of this article.

    Amends GS 95-25.22 adding subsection (a2) clarifying liability of an employer found in violation of GS 95-25.13 to be in the form of actual damages, including, but not limited to, lost wages and benefits plus interest.

    Amends GS 95-25.22 adding subsection (a3) expanding the forms of damages available to employees to include statutory damages of up to $500 per employee per violation.

    Amends GS 95-25.22(d) to require awarding costs, fees, and attorneys' fees in addition to a judgment awarded to a plaintiff.

    Amends GS 95-25.22 adding an exception to the statute of limitations for actions arising out of a willful violation. Such actions may be brought within three years. Actions may also be brought within one year after notification to the employee of final disposition by the state of a complaint for the same violation.

    Amends GS 95-25.23 expanding civil penalties to include violations of provisions relating to minimum wage, overtime, wage payment, or notification.

    Enacts GS 95-25.23D entitling an employee to enumerated liens for the purpose of wage claims and collections under this Article and outlining perfection and priority of liens. Liens recorded pursuant to subsection (f) take precedence over all other debts, decrees, liens, or mortgages against the employer. A successful action to foreclose a lien pursuant to this section entitles the employee to court costs and reasonable attorneys' fees. Provides further regulations of the liens.

    Section 1.6

    Adds a new Article 17, Fair Assessment of Persons with Criminal Histories, to GS Chapter 126. Defines the following terms as they apply in this Article: (1) criminal history means a state or federal history of conviction for a misdemeanor or felony relevant to an applicant's fitness for public employment but does not include a record of arrest that did not result in a conviction; (2) hiring authority means an agent responsible by law for the hiring of persons for public employment; and (3) public employment means any employment, including seasonal or temporary work, where the State or any local political subdivision of the State is the employer.

    Prohibits a hiring authority from (1) asking about or considering the criminal history of an applicant for public employment or (2) including such an inquiry on any initial employment application form until the hiring authority has made a conditional offer of employment to the applicant. Declares that this Article does not apply to public employment in positions where the hiring authority is required by law to consider the applicant's criminal record. Provides that nothing in this Article is to be construed to prevent any hiring authority in its discretion from adopting the provisions of this Article.

    Prohibits any person from being disqualified for public employment solely or in part because of a previous conviction except as otherwise required by law or if the conviction is determined to be substantially related to the qualifications, functions, or duties of the position after all of the following factors are considered: (1) the level and seriousness of the crime; (2) the date of the crime; (3) the age of the person at the time of conviction; (4) the circumstances surrounding the commission of the crime; (5) the connection between the criminal conduct and the duties of the position; (6) the prison, jail, probation, parole, rehabilitation, and employment records of the person since the date the crime was committed; and (7) the subsequent commission of a crime by the person. Clarifies that an arrest record that did not result in a conviction cannot be the basis for disqualification from public employment.

    Requires a hiring authority to inform an individual of a potential adverse hiring decision based on the background check and provide the applicant an opportunity to provide evidence that the report is incorrect or inaccurate.

    Specifies criteria governing data to be collected by the State Human Resources Commission.

    Declares that the provisions of this Article apply to all applicants for public employment. Makes a conforming change to GS 126-5.

    Effective when the act becomes law and applies to applications for employment made on or after that date.

    Section 1.7

    Repeals GS 95-98 (prohibiting public employee union collective bargaining agreements).

    Section 1.8

    Reenacts GS 105-151.31 (earned income tax credit), which provides an individual who claims an income tax credit under section 32 of the Internal Revenue Code (IRS Code) for the taxable year with a credit against the tax imposed by the Individual Income Tax Act (Act), as it existed immediately before its specified sunset expiration. Also amends the statute by establishing that the allowable credit against the tax imposed by the Act is to be equal to 5% (was, a percentage of up to 5% based on the taxable year) of the amount of credit the individual qualified for under section 32 of the Code. Repeals the provision providing that Section 3507 of the Internal Revenue Code, Advance Payment of Earned Income Credit, does not apply to the credit. Repeals the sunset provision. 

    Effective for taxable years on or after January 1, 2023.

    Section 1.9

    Enacts GS 115C-151.34, providing for a tax credit against federal income tax for a percentage of employment-related expenses under section 21 of the Internal Revenue Code as a credit against state income tax at an amount equal to 100% of the amount provided under the section that is claimed. Requires provision of required information to the Secretary of Revenue to claim the credit. Reduces the credit amount as specified based on adjusted gross income and filing status. Provides for reduction based on nonresident or part-year resident status. Effective for taxable years beginning on or after January 1, 2023.

    Section 2.1

    Amends GS 96-14.2 to revise the calculation and cap of the weekly unemployment benefit amount, now providing for an amount equal to the wages paid to the individual in the highest paid quarter of the individual’s bass period (rather than the last two completed quarters) divided by 52 and rounded to the next lower dollar. Increases the weekly benefit cap from $350 to $680. Effective for benefit weeks beginning on or after April 1, 2023.

    Section 2.2

    Amends GS 96-14.3 to establish a maximum duration of receipt of unemployment benefits at 26 weeks, unless expressly extended by state or federal law. Makes conforming changes to eliminate adjustments to the benefit period based on seasonal statewide unemployment rates. 

    Section 2.3 

    Requires the Legislative Research Commission (LRC) to study expanding the State's employment security system to cover self-employed workers (means an individual who has a contract or arrangement to perform work or services, including app-based ride-share and food delivery drivers, freelancers, and other similar "gig economy" workers) who are laid off or have hours reduced due to an economic downturn. Requires a report of its findings and legislative proposals to the 2024 Session of the 2023 General Assembly.

    Section 3.1

    Amends GS 97-53 to expand the definition of occupational diseases applicable to the Workers’ Compensation Act to include a pandemic infection contracted by a covered person which is presumed to be due to exposure in the course of the covered person’s employment. Defines covered person to mean (1) a law enforcement officer, jailer, prison guard, firefighter, or an emergency medical technician, or paramedic employed by a State or local government employer, including volunteer firefighters; (2) a health care worker; or (3) an employee required to work during the pandemic for a business declared essential by executive order or municipal order, including food service, retail, and other essential personnel. Defines pandemic. 

    Section 3.2

    Directs that the following local government employees must be credited by their respective employers for any sick or vacation leave taken by the employee to comply with a quarantine related to exposure of the coronavirus: (1) health care workers; and (2) a law enforcement officer, jailer, prison guard, firefighter, or an emergency medical technician, paramedic, or volunteer firefighter.

    Section 4.1

    Enacts GS 126-8.6 as follows. States legislative findings and state policy. Sets forth eight defined terms. Deems it the responsibility of the head of each State agency to consult with local, State, and federal public health officials to assess the severity of the individual situation and to determine the actions that must be taken. Sets forth required actions of each State agency. Requires predetermination and designation of mandatory operations and designating mandatory employees to staff operations when isolation, quarantine, and social distancing are public health control measures that may be required to protect public health during a communicable disease pandemic or epidemic. Requires the agency to provide certain accommodations and extra hazard pay, as specified, if the mandatory employee is required to remain at the work site for an extended period of time. Mandates hazard pay at a rate of at least 1.5 or equivalent compensatory time for hours worked onsite up to 40 hours in a work week when an agency is closed or when management determines that only mandatory employees are required to report to the work site. Details further parameters of hazard pay. Authorizes disciplinary action against mandatory employees for willful failure to report to or remain at work; provides for appeal of a denial of exemption under GS 126-34.02. Defines the scope of the statute to include all State employees, regardless of exemption from the Chapter. Makes conforming changes to allow the treatment of mandatory employees to be heard as a contested case after completion of the agency grievance procedure and the Office of State Human Resources review. Makes conforming changes to GS 126-8 regarding minimum leave granted to State employees. 

    Section 5.1

    Directs the Legislative Research Commission to study the practices of local government and private employers regarding hazard pay for their employees, and report to the 2024 Regular Session of the NCGA upon its convening.

    Section 6.1

    Appropriates $5 million from the General Fund to the Office of State Budget and Management for 2023-24 to fund mandatory employee hazard pay pursuant to the act. 

    Appropriates $5 million from the General Fund to the Office of State Human Resources for 2023-24 to settle claims filed by State employees who contract the coronavirus in the course of State employment as provided in the act. Requires the funds to remain available until December 31, 2023, whereupon the funds can by used to assist State agencies with the settlement of prior outstanding workers’ compensation claims. 

    Effective July 1, 2023.

    Section 7.1

    Makes the act on the date the act becomes law, unless otherwise provided.