Bill Summaries: H569 WORKING FAMILIES ACT.

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  • Summary date: Apr 5 2023 - View Summary

    Identical to S 555, filed 4/4/23.

    Section 1

    Amends Section 9C.4(b) of SL 2021-180 by reducing the amount families must pay for subsidized child care from 10% to 7% of gross family income. Effective July 1, 2023.

    Section 2

    Amends GS 105-153.10, which provides for the the state child tax credit. Defines qualifying child by reference to the Internal Revenue Code (Code). Eliminates the provisions which require the taxpayer to be permitted a federal tax credit as a qualifying condition to the state child tax credit. Increases the credit amount, ranging from $125 to $250 depending on filing status (was, $100 to $125). Updates the statutory cross-reference regarding the calculation of state taxable income. Prohibits married individuals who file separate returns from collectively claiming more than the maximum credit allowed under a joint return. Eliminates the provision that prohibits the credit allowed from exceeding the amount of individual income tax imposed by the Part 2, Article 4, for the taxable year reduced by the sum of all credits allowed, excluding payments made by or on behalf of the taxpayer. Instead, enacts new provisions that allow the credit to exceed the amount of individual income tax imposed for the taxable year reduced by the sum of all credits allowable, and requires the Secretary of the Department of Revenue to issue a refund of the excess to the taxpayer. Provides for refunds and computation of allowable credits, with nonrefundable credits subtracted before refundable credits. Effective for taxable years beginning on or after January 1, 2023. 

    Section 3

    Amends GS 95-25.3, effective Labor Day, September 4, 2023, by increasing the minimum wage from $6.15 to $15 per hour. Also allows a local government to adopt an ordinance establishing a higher local minimum wage.

    Section 4

    Amends GS 105-277.1B by increasing the limit on the income eligibility for the property tax homestead circuit breaker from 150% to 180% of the income eligibility limit.

    Section 5

    Directs the Housing Finance Agency (Agency) to establish a program under the Homeownership Fund to provide assistance, in the form of reimbursement or direct payment, to first-time homebuyers that are employed full-time as public servants in the State. Defines public servant as an active duty member or veteran, law enforcement officer, teacher, firefighter, or EMS personnel employed in the State. Defines first-time homebuyer. Provides for the lesser of $25,000 or 10% of the purchase price for down payment assistance, mortgage insurance premium assistance, and closing costs. Allows for monthly mortgage insurance payment assistance for up to 60 months for any single first-time homebuyer. Authorizes the Agency to adopt, modify, or repeal rules and regulations to implement the act. Includes other defined terms. 

    Appropriates $150 million in recurring funds from the General Fund to the Homeownership Assistance Fund for 2023-24 to be used to implement the act. 

    Effective July 1, 2023. 

    Section 6

    Enacts new GS Chapter 96A, to be cited as the "North Carolina Paid Family Leave Insurance Act." Sets forth 15 defined terms applicable to the Chapter. Deems family and medical leave benefits provided under the terms of the Chapter payable beginning January 1, 2025, to covered individuals, defined as any person who submits an application and meets the monetary eligibility criteria set forth in GS 96-14.1(b) (regarding unemployment benefit claims) or is self-employed, elects coverage, and meets the requirements of new GS 96A-13, and meets the administrative requirements of the new Chapter and rules adopted thereunder, who meet one of five requirements, including: (1) is caring for a new child during the first year after birth, adoption, or child placement; (2) is caring for a family member with a serious health condition; (3) has a serious health condition; (4) is caring for a covered service member, as defined, who is the covered individual's next of kin or other family member; and (5) because of any qualifying exigency leave (as defined) arising out of the fact that the family member of the covered individual is on active duty or has been notified of an impending call or order to active duty in the Armed Forces. Defines family member, next of kin, and serious health condition. Specifies maximum duration of benefits based on eligibility requirement, ranging from 12 weeks to 26 weeks. Provides for payment within two weeks of filing a claim and every two weeks thereafter. Details parameters regarding the determination of payment amounts, with the maximum benefit permitted to be 100% of the statewide average weekly wage, and the minimum benefit set at $100 per week, unless the covered individual's average weekly wage is less than the amount of that full wage. Bars payment for less than eight hours of leave taken in one work week.

    Beginning on January 1, 2024, requires an employer to remit contributions to the Paid Family and Medical Leave Fund (Fund), at a rate annually fixed by the Assistant Secretary of the Division of Employment Security (DES). Provides for the setting of contribution rates for 2024 and 2025, and 2026 and subsequent years. Defines employer to include individuals, partnerships, associations, corporations, business trusts, legal representatives, any organized group, the State, political subdivisions of the State and any State or local agency or government instrumentality; excludes the federal government. Requires self-employed individuals electing coverage to make employer contributions as specified. Bars deducting more than 50% of the contribution required from that employee's wages.

    Authorizes the covered individual to opt to take paid family and medical leave on an intermittent or reduced leave schedule with prorated benefits, subject to total leave permitted by the Chapter, employer operations, and notice requirements. 

    Provides for the covered individual's restoration by the employer to the position held by the covered individual upon expiration of family and medical leave as when the leave commenced, or a position with equivalent seniority, status, employment benefits, pay, and other terms and conditions of employment. Requires employers to maintain health benefits the covered individual had prior to leave for the leave duration, with the covered individual required to continue required applicable contributions. Details employer liability for violation of these protection provisions, including damages for compensation denied or lost with interest and liquidated damages, or actual monetary losses sustained up to a sum of 12 weeks of wages or salary of the employee, and equitable relief. Allows for an action for damages to be brought in any federal or State court by one or more employees against an employer for or on behalf of the employees or the employees and others similarly situated. Provides for the award of costs of the action, such as reasonable attorneys' fees and expert witness fees. Establishes a two year statute of limitations, with a three year statute of limitations for willful violations.

    Bars prohibiting the exercise of or interfering with the exercise of rights protected by the Chapter. Prohibits retaliatory personnel actions or otherwise discriminating against a person for exercising protected rights under the Chapter. Includes a non-exhaustive list of rights protected under the Chapter to which the anti-retaliation provisions apply. Prohibits employers from counting leave taken under the Chapter as an absence that can lead to or result in an adverse employment action. Makes these provisions applicable to persons who allege violations in good faith. Provides for the liability provisions regarding employment protections to apply to the anti-retaliation provisions. 

    Provides for concurrent leave under the federal Family and Medical Leave Act (FMLA). Provides for concurrent or coordinated payments and leave for disability or family care leave under a collective bargaining agreement or employer policy subject to written notice. Provides for the effect of such agreements and policy on an individual's rights and an employer's duties under the Chapter.

    Provides for notice by the employer upon hiring and annually thereafter and when leave under the Chapter is requested or anticipated, stating rights and terms under the Chapter, benefit amounts, benefit procedures, Chapter protections, and rights to bring an action or file a complaint. Also requires posting of the notice in languages specified. Authorizes the Assistant Secretary to adopt rules establishing additional notice requirements. Requires employees to provide notice to their employer as soon as practicable of their intention to take leave under the Chapter. 

    Directs the Assistant Secretary to establish a system for appeal of denied leave under the Chapter. Provides for judicial review of leave benefits after an aggrieved party has exhausted administrative remedies established by the Assistant Secretary. Directs the Assistant Secretary to implement confidentiality procedures for claims filed and appeals taken.

    Mandates disqualification from benefits for a period of one year for willfully falsifying or misrepresenting material facts or willfully failing to report a material fact to obtain Chapter benefits. Provides for DES to seek repayment of benefits resulting from material misrepresentation or claim rejection following benefit payment. Authorizes the Assistant Secretary to waive all or some of the amount where recovery would be against equity or good conscience. 

    Requires self-employed persons electing coverage to do so for an initial period of at least three years, effective upon filing written notice with the Assistant Secretary and agreeing to supply necessary income information. Provides for coverage withdrawal by self-employed persons.

    Directs DES to establish and administer a family and medical leave insurance program and collect employer contributions under the Chapter. Requires DES to begin receiving and paying Chapter claims by January 1, 2025. Provides for application content and procedures. Requires DES to notify an employer within five business days of a claim filed under the Chapter. Provides for information sharing subject to the individual's consent. Deems files and records of individuals under the Chapter confidential, with the individual or authorized representative authorized to review the records or receive information from the records upon presentation of the individual's signed authorization. Directs the Department of Commerce to adopt necessary implementing rules for the Chapter. 

    Provides for notice upon filing a claim if the IRS determined benefits to be subject to federal income tax.

    Creates the Fund within the custody of DES solely to pay Chapter benefits, with expenditure authority restricted to the Assistant Secretary or a designee. Authorizes investment actions with excess funds by DES.

    Creates the Employer Grant Fund to offset employer costs of the program if they demonstrate the need for financial assistance. Specifies that the Fund consists of appropriations from the General Fund  and unconditional and unrestricted donations from public agencies and private sources. Requires the Department of Commerce to adopt rules to administer the fund.

    Establishes an annual reporting requirement for DES to report to the NCGA, beginning January 1, 2026, on projected and actual program participation by leave purpose, gender of the beneficiary, premium rates, fund balances, outreach efforts, and family members for whom leave was taken to provide care, as applicable. 

    Directs DES to conduct a public education campaign, with outreach information available in specified languages.

    Encourages DES to use State data collection and technology to the extent possible and to integrate the program with existing State policies. 

    Includes a severability clause. 

    Requires implementing rules to be adopted by October 1, 2023. 

    Appropriates $19 million for 2023-24 and $30 million for 2024-25 from the General Fund to the Department of Commerce, Employer Grant Fund, to offset employer costs of the Paid Family Medical Leave Act. Effective July 1, 2023.