Workers' Rights Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 403

Short Title: Workers' Rights Act. (Public)
Sponsors: Representatives Logan, Greenfield, Harrison, and Roberson (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
March 17, 2025
*H403-v-1*
A BILL TO BE ENTITLED 1
AN ACT PROTECTING WO RKERS' RIGHTS IN NOR TH CAROLINA AND 2
APPROPRIATING FUNDS FOR THAT PURPOSE. 3
The General Assembly of North Carolina enacts: 4
5
PART I. INDIVIDUAL PROTECTIONS 6
7
AT-WILL EMPLOYMENT ABOLISHED 8
SECTION 1.1. Abolish At-Will Employment. – The General Assembly finds that: 9
(1) The origin of the employment at-will doctrine has been traced back to an 1877 10
treatise that legal scholars have since questioned. The employment at -will 11
doctrine is disfavored by several states and by almo st all modern, 12
industrialized nations. The employment at -will doctrine allows an employer 13
to terminate an employee for unfair reasons or for no reason at all, with this 14
imbalance of power created by the employment at -will doctrine adversely 15
affecting personal freedom and economic security. 16
(2) The implied covenant of good faith and fair dealing is an important legal 17
doctrine that underpins the Uniform Commercial Code in section 1 -304. The 18
implied covenant of good faith and fair dealing is recognized by the American 19
Law Institute as section 205 of the Restatement (Second) of Contracts. 20
(3) Good public policy dictates that acts of bad faith should not be tolerated just 21
because they are committed as part of an employment contract, thus 22
warranting the statutory prohibition of at -will employment contained in this 23
act. 24
SECTION 1.2. Article 3 of Chapter 95 of the General Statutes is amended by adding 25
a new section to read: 26
"§ 95-31.1. Covenant of good faith and fair dealing; at-will employment abolished. 27
(a) The General Assembly finds that every contract for employment, whether the contract 28
is written or oral, consists of both express and implied terms that are legal covenants between the 29
parties to the contract. Further, the General Assembly declares that an implied covenant of good 30
faith and fair dealing is part of every employment contract in this State. Therefore, it is the public 31
policy of this State that the employment at-will doctrine is inconsistent with the implied covenant 32
of good faith and fair dealing that is part of every employment contract in this State. 33
(b) The doctrine of at-will employment is abolished in this State. 34
(c) An employee in this State may only be fired for just cause." 35
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Page 2 House Bill 403-First Edition
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MANDATORY PAID WORK BREAKS AND PAID MEAL PERIODS 2
SECTION 1.3. Article 2A of Chapter 95 of the General Statutes is amended by 3
adding a new section to read: 4
"§ 95-25.6A. Paid work break and meal period required. 5
(a) An employee who is to work more than six continuous hours during a 24-hour period 6
shall be provided a paid meal period of 60 minutes and at least one paid work break of 15 minutes. 7
(b) An employee who is to work six continuous hours or less during a 24-hour period 8
shall be provided at least one paid work break of 15 minutes." 9
10
ELIMINATE THE SUBMINIMUM WAGE FOR TIPPED EMPLOYEES 11
SECTION 1.4. Effective January 1, 2026, G.S. 95-25.3(f) reads as rewritten: 12
"(f) Tips earned by a tipped employee may be counted as wages only up to the amount 13
permitted in section 3(m) of the Fair Labor Standards Act, 29 U.S.C. 203(m), if the tipped 14
employee is notified in advance, is permitted to retain all tips and the employer maintains 15
accurate and complete records of tips received by each employee as such tips are certified by the 16
employee monthly or for each pay period. Even if the employee refuses to certify tips accurately, 17
tips may still be counted as wages when the employer complies with the other requiremen ts of 18
this section and can demonstrate by monitoring tips that the employee regularly receives tips in 19
the amount for which the credit is taken. shall not be counted as wages. Tip pooling shall also be 20
permissible among employees who customarily and regula rly receive tips; however, no 21
employee's tips may be reduced by more than fifteen percent (15%) under a tip pooling 22
arrangement." 23
24
NO DISCRIMINATION OR RETALIATION FOR DISCLOSING WAGE 25
INFORMATION 26
SECTION 1.5.(a) Article 2A of Chapter 95 of the General Sta tutes is amended by 27
adding a new section to read: 28
"§ 95-25.6B. Right to disclose and discuss wage information. 29
(a) The General Assembly finds that an employee has the right to disclose and discuss 30
information about employee wages. 31
(b) No employer may do any of the following: 32
(1) Require, as a condition of employment, that an employee refrain from 33
disclosing the amount of the employee's wages. 34
(2) Require an employee to sign a waiver or other document that purports to deny 35
the employee the right to disclose the amount of the employee's wages. 36
(3) Discharge, discipline, or otherwise discriminate against an employee for 37
inquiring about, disclosing, comparing, or otherwise discussing the 38
employee's wages or the wages of any other employee." 39
SECTION 1.5.(b) G.S. 95-241(a) reads as rewritten: 40
"(a) No person shall discriminate or take any retaliatory action against an employee 41
because the employee in good faith does or threatens to do any of the following: 42
(1) File a claim or complaint, initiate any inquiry, investigation, inspection, 43
proceeding or other action, or testify or provide information to any person 44
with respect to any of the following: 45
a. Chapter 97 of the General Statutes. 46
b. Article 2A or Article 16 of this Chapter. 47
c. Article 2A of Chapter 74 of the General Statutes. 48
d. G.S. 95-28.1. 49
e. Article 16 of Chapter 127A of the General Statutes. 50
f. G.S. 95-28.1A. 51
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House Bill 403-First Edition Page 3
g. Article 52 of Chapter 143 of the General Statutes. 1
h. Article 5F of Chapter 90 of the General Statutes. 2
(2) Cause any of the act ivities listed in subdivision (1) of this subsection to be 3
initiated on an employee's behalf. 4
(3) Exercise any right on behalf of the employee or any other employee afforded 5
by Article 2A or Article 16 of this Chapter, by Article 2A of Chapter 74 of the 6
General Statutes, or by Article 52 of Chapter 143 of the General Statutes. 7
(4) Comply with the provisions of Article 27 of Chapter 7B of the General 8
Statutes. 9
(5) Exercise rights under Chapter 50B. Actions brought under this subdivision 10
shall be in accordance with the provisions of G.S. 50B-5.5. 11
(6) Exercise rights under G.S. 95-25.6B." 12
SECTION 1.5.(c) This section is effective when it becomes law and applies to 13
employment in this State on or after that date. 14
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PART II. STATE EMPLOYEE AND CONTRACTOR PROTECTIONS 16
17
REPEAL BAN ON PUBLIC EMPLOYEE COLLECTIVE BARGAINING 18
SECTION 2.1. G.S. 95-98 is repealed. 19
20
OMBUD'S OFFICE CREATED/NO MISTREATMENT OF CONTRACT EMPLOYEES 21
SECTION 2.2.(a) G.S. 126-4 reads as rewritten: 22
"§ 126-4. Powers and duties of State Human Resources Commission. 23
Subject to the approval of the Governor, the State Human Resources Commission shall 24
establish policies and rules governing each of the following: 25
… 26
(20) Delegation of authority to an Ombud's Office charged with providing 27
independent review of State employee workplace complaints and assistance 28
to State employees in resolving workplace issues. In addition, t he Ombud's 29
Office shall establish programs to educate State employees about their rights 30
and to train both supervisors and employees in dispute resolution techniques 31
appropriate for the State government workplace. 32
…." 33
SECTION 2.2.(b) Chapter 126 of the General Statutes is amended by adding a new 34
Article to read: 35
"Article 17. 36
"Contract Employee Protection. 37
"§ 126-100. Definitions. 38
The following definitions apply in this Article: 39
(1) Adverse action. – Any of the following actions taken by a private third -party 40
employer or a State government employee against a contract employee: 41
a. Reassignment to less-desired work location. 42
b. A reduction in compensation. 43
c. Failure to give a promised or customary increase in compensation or 44
work status. 45
d. Disciplinary action, including discharge, demotion, or transfer. 46
e. More intensive or critical supervision. 47
f. Withdrawal of previously allowed privileges. 48
g. Assignment to more difficult duties. 49
h. A demand of increased production for a retaliatory purpose. 50
i. Treatment that subjects the contract employee to workplace bullying. 51
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(2) Contract employee. – An employee of a private third -party employer who is 1
assigned to work in a State government workplace or on a State -controlled 2
project. 3
(3) Private third-party employer. – A nongovernmental employer that (i) employs 4
two or more employees and (ii) has a contract with the State to furnish 5
employees to a State agency, department, or institution to perform personal 6
services in a State government workplace or on a State-controlled project. 7
(4) Workplace bullying. – A persistent pattern of mistreatment from others in the 8
workplace that causes physical, emotional , or financial harm, including, but 9
not limited to , verbal, nonverbal, psychological, or physical abuse and 10
interference with an employee's work or career advancement. 11
"§ 126-101. Mistreatment of contract employees prohibited. 12
(a) It is against the public policy of this State for any State employee to mistreat a contract 13
employee in the State government workplace or in connection with a State-controlled project. It 14
is the duty of each supervisor in a State government workplace to take all reasonable steps to 15
prevent mistreatment of contract employees. 16
(b) No State employee shall take or cause a private third -party employer to initiate an 17
adverse action against a contract employee in retaliation for the contract employee doing any of 18
the following: 19
(1) Making a complaint or providing information, in good faith, to the North 20
Carolina Department of Labor or the United States Department of Labor about 21
a possible labor law violation by the private third -party employer or by the 22
State agency, department, or institution. 23
(2) Testifying in any investigation made or other proceeding held under State, 24
local, or federal law relating to a State government workplace or 25
State-controlled project. 26
(3) Exercising any employee rights that are protected under State, local, or federal 27
law. 28
(4) Complaining about workplace bullying in a State government workplace or in 29
connection with a State-controlled project. 30
Any State employee who violates this subsection shall be subject to disciplinary action up to 31
and including termination from State government employment. 32
(c) A private third -party employer shall not take adverse action against a contract 33
employee in retaliation for the contract employee doing any of the following: 34
(1) Making a complaint or providing information, in good faith, to the North 35
Carolina Department of Labor or the United States Department of Labor about 36
a possible labor law violation by the private third -party employer or by the 37
State agency, department, or institution. 38
(2) Testifying in any investigation made or other proceeding held under State, 39
local, or federal law relating to a State government workplace or 40
State-controlled project. 41
(3) Exercising any employee rights that are protected under State, local, or federal 42
law. 43
(4) Complaining about workplace bullying in the State government workplace or 44
in connection with a State-controlled project. 45
(d) The North Carolina Department of Labor shall investigate alleged violations of this 46
section and may assess a civil penalty against a private third-party employer in an amount from 47
one thousand dollars ($1,000) to twenty thousand dollars ($20,000) for each violation of this 48
section. A private third-party employer who is found by the North Carolina Department of Labor 49
to have violated this section shall be ineligible to enter into contracts with any State agency, 50
department, or institution for a period of five years. 51
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(e) The contract employee may bring a civil action against a private third-party employer 1
for a violation of this subsection in the superior court of the county where the violation occurred 2
or where the contract employee lives within two years of the date of the alleged adverse action. 3
If the contract employee is the prevailing party in an action under this subsection, the court may 4
order reinstatement, back pay, and other appropriate relief and shall order payment of the 5
prevailing party's attorneys' fees and litigation costs by the losing party. 6
(f) The Department of Labor and the State Human Resour ces Commission shall jointly 7
develop, publish, and distribute educational and training materials about contract employee rights 8
under this section, including physical posters to be placed conspicuously in the workplace and 9
online materials made available over the internet. 10
"§ 126-102. Applicability; notices; rules. 11
(a) This Article applies to all State employees , including those subject to, and those 12
exempt from, provisions of this Chapter. 13
(b) This Article does not apply to a contract in which the federal government is a party. 14
(c) It is the duty of both the private third-party employer and the State employer to post 15
notice in accordance with G.S. 95-9 or use other appropriate means to keep all employees 16
informed of their protections and obligations under this Article. 17
(d) This section provides rights, obligations, procedures, and relief in addition to, and not 18
in lieu of, what is provided under Article 14 of this Chapter and Article 21 of Chapter 95 of the 19
General Statutes. 20
(e) The North Carolina Department of Labor and the State Human Resources 21
Commission shall collaborate, and each shall adopt the appropriate rules, to carry out the 22
provisions of this Article." 23
24
OMBUD'S OFFICE FUNDING 25
SECTION 2.3.(a) There is appropriated from the General Fund to the Department 26
of Administration, State Human Resources Commission, the sum of one hundred eighty thousand 27
dollars ($180,000) in recurring funds for each year of the 2025-2027 fiscal biennium for two new 28
personnel positions to support establishment of the Ombud's Office created by this act. 29
SECTION 2.3.(b) There is appropriated from the General Fund to the Department 30
of Administration, State Human Resources Commission, the sum of one hundred thousand 31
dollars ($100,000) in nonrecurring funds for each year of the 2025-2027 fiscal biennium to fund 32
enforcement, training, and educational efforts concerning G.S. 126-101, as enacted by this act, 33
and to combat workplace bullying in State government. 34
SECTION 2.3.(c) There is appropriated from t he General Fund to the Department 35
of Labor the sum of seventy -seven thousand dollars ($77,000) in recurring funds for each year 36
of the 2025-2027 fiscal biennium for one new personnel position to conduct investigations related 37
to the enforcement of G.S. 126-101, as enacted by this act. 38
SECTION 2.3.(d) This section becomes effective July 1, 2025. 39
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PART III. RESTORE ST ATE AND LOCAL GOVERN MENT RETIREE MEDICAL 41
BENEFITS 42
SECTION 2.4.(a) Subsections (c) and (d) of Section 35.21 of S.L. 2017 -57 are 43
repealed. 44
SECTION 2.4.(b) This section is effective retroactively to December 31, 2020. 45
46
PART IV. LOCAL GOVERNMENT PROTECTIONS 47
48
NO BAN ON LOCAL MINIMUM WAGES 49
SECTION 3.1. Sections 5.9(a), 5.9(b), and 5.9(c) of S.L. 2023-134 are repealed. 50
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SECTION 3.2. Article 23 of Chapter 153A of the General Statutes is amended by 1
adding a new section to read: 2
"§ 153A-466. Authority to adopt local minimum wage ordinances. 3
A county may by ordinance set a local minimum wage." 4
SECTION 3.3. Article 21 of Chapter 160A of the General Statutes is amended by 5
adding a new section to read: 6
"§ 160A-499.11. Authority to adopt local minimum wage ordinances. 7
A city may by ordinance set a local minimum wage." 8
9
WORKER SAFETY PROGRAMS BY LOCAL GOVERNMENTS 10
SECTION 3.4.(a) Article 21 of Chapter 160A of the General Statutes is amended by 11
adding a new section to read: 12
"§ 160A-492.1. Worker safety programs. 13
The governing body of any city, town, or county is hereby authorized to undertake, and to 14
expend tax or nontax funds for, worker safety activities and programs and health standards and 15
practices applicable to the field of employment that are equivalent to or greater than State or 16
federal requirements. The governing body may appoint worker safety committees or boards and 17
citizens' committees, as it may deem necessary in carrying out the programs and activities, may 18
authorize the employment of personnel by the committees or boards, and may establish their 19
duties, responsibilities, and powers. The ci ties and counties may jointly undertake any program 20
or activity which they are authorized to undertake by this section. The expenses of undertaking 21
and engaging in the worker safety programs and activities authorized by this section are necessary 22
expenses for which funds derived from taxation may be expended without the necessity of prior 23
approval of the voters." 24
SECTION 3.4.(b) G.S. 153A-445(a) is amended by adding a new subdivision to 25
read: 26
"(5a) G.S. 160A-492.1. – Worker safety programs." 27
28
FUNDING FOR WORKER SAFETY INSPECTIONS 29
SECTION 3.5.(a) There is appropriated from the General Fund to the Department 30
of Labor the sum of three hundred thousand dollars ($300,000) in recurring funds for the 31
2025-2026 fiscal year for new personnel positions to conduct s afety inspections related to local 32
worker safety protections established under this act. 33
SECTION 3.5.(b) This section becomes effective July 1, 2025. 34
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PART V. EFFECTIVE DATE 36
SECTION 4.1. Unless otherwise provided, this act is effective when it becomes law. 37