Economic Security Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 326

Short Title: Economic Security Act. (Public)
Sponsors: Senators Murdock, Mayfield, and Grafstein (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 19, 2025
*S326-v-1*
A BILL TO BE ENTITLED 1
AN ACT ADVANCING ECO NOMIC SECURITY FOR A LL IN NORTH CAROLINA BY 2
INCREASING THE STATE MINIMUM WAGE TO TWE NTY-TWO DOLLARS PER 3
HOUR, ADJUSTED FOR INFLATION ANNUALLY; MANDATING EQUAL PAY FOR 4
EQUAL WORK; REQUIRING PAID SICK LEAVE, PAID FAMILY MEDICAL LEAVE, 5
AND WORKPLACE SAFETY , EMERGENCY, AND EVA CUATION PROTECTIONS; 6
RESTORING UNEMPLOYME NT INSURANCE BENEFIT S ADJUSTED FOR 7
INFLATION AND STUDYI NG UNEMPLOYMENT INSU RANCE BENEFITS FOR 8
APP-BASED "GIG ECONO MY" WORKERS; INCREAS ING THE TIPPED MINI MUM 9
WAGE; ENDING WAGE TH EFT; REQUIRING THE F AIR ASSESSMENT OF 10
PERSONS WITH CRIMINA L HISTORIES BY "BANN ING THE BOX"; REPEAL ING 11
PUBLIC EMPLOYEE COLL ECTIVE BARGAINING RE STRICTIONS; REENACTING 12
THE EARNED INCOME TA X CREDIT AND TAX CRE DITS FOR CHILD AND 13
DEPENDENT CARE EXPENSES; CRE ATING A REBUTTABLE P RESUMPTION 14
THAT FIRST RESPONDER S, HEALTH CARE WORKE RS, AND ESSENTIAL 15
SERVICE WORKERS INFE CTED BY THE CORONAVI RUS CONTRACTED THE 16
DISEASE IN THE COURS E OF EMPLOYMENT; AND PROVIDING AND 17
APPROPRIATING FUNDS FOR A COST-OF-LIVING ADJUSTMENT FOR RETIREES 18
OF THE TEACHERS' AND STATE EMPLOYEES' RE TIREMENT SYSTEM, THE 19
CONSOLIDATED JUDICIA L RETIREMENT SYSTEM, THE LEGISLATIVE 20
RETIREMENT SYSTEM, A ND THE LOCAL GOVERNM ENTAL EMPLOYEES' 21
RETIREMENT SYSTEM. 22
The General Assembly of North Carolina enacts: 23
24
LIVING WAGE 25
SECTION 1.1.(a) This act shall be known and may be cited as the "Economic 26
Security Act of 2025." 27
SECTION 1.1.(b) Effective January 1, 2026, G.S. 95-25.3 reads as rewritten: 28
"§ 95-25.3. Minimum wage. 29
(a) Every employer shall pay to each employee who in any workweek performs any work, 30
wages of at least six dollars and fifteen cents ($6.15) twenty-two dollars ($22.00) per hour or the 31
minimum wage set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 32
206(a)(1), as that wage may change from time to time, whichever is higher, except as otherwise 33
provided in this section. 34
(a1) Beginning September 30, 202 6, and on each September 30 thereafter, the 35
Commissioner of Labor shall calculate an adjusted minimum wage rate using the Consumer Price 36
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Page 2 Senate Bill 326-First Edition
Index (All Urban Consumers, U.S. City Average for All Items), CPI-I, or its successor index, as 1
calculated by the U.S. Department of Labor for the 12 -month period preceding the previous 2
September 1. Each adjusted minimum wage rate calculated shall be published on September 30 3
and take effect on the following January 1. 4
…." 5
SECTION 1.1.(c) This section is effective when this act becomes law. 6
7
EQUAL PAY FOR EQUAL WORK 8
SECTION 1.2.(a) Chapter 95 of the General Statutes is amended by adding a new 9
Article to read: 10
"Article 2B. 11
"Equal Pay Act. 12
"§ 95-25.26. Definitions. 13
The following definitions apply in this Article: 14
(1) Employee. – Every person in receipt of or entitled to compensation for labor 15
performed for another. 16
(2) Employer. – Includes (i) this State and any local political subdivision of th e 17
State and (ii) every person having control or direction of any person employed 18
at any labor, or responsible directly or indirectly for the wages of another, who 19
employs more than five employees. 20
(3) Person. – As defined by G.S. 95-25.2(11). 21
(4) Wage or wages. – Any compensation for labor measured by time, piece, or 22
otherwise. 23
"§ 95-25.27. Equal wage rates. 24
(a) No employer may pay any person in the employer's employ at wage rates less than 25
the rates paid to employees of the opposite sex in the same establishment for the same quantity 26
and quality of the same classification of work. Any employer who violates this section is liable 27
to the employee affected in the amount of the wages that the employee is deprived by reason of 28
the violation. 29
(b) Notwithstanding the provisions of subsection (a) of this section, nothing in this 30
section prohibits a variation of rates of pay for employees engaged in the same c lassification of 31
work based upon seniority, a difference in length of service, ability, skill, difference in duties or 32
services performed, whether regularly or occasionally, difference in the shift or time of day 33
worked, hours of work, or restrictions or p rohibitions on lifting or moving objects in excess of 34
specified weight, or other reasonable differentiation, or factor or factors other than sex, when 35
exercised in good faith. 36
(c) An employer that is in violation of this section may not reduce the pay of any 37
employee in order to bring the employer into compliance with this Article. 38
(d) An employer shall not retaliate against any employee who seeks redress pursuant to 39
this Article or who participates in the investigation of a complaint under this Article. 40
"§ 95-25.28. Complaints; enforcement; civil actions. 41
(a) An affected employee may file with the Department of Labor a complaint that the 42
wages paid to the employee are less than the wages to which the employee is entitled under this 43
Article. The Department of Labor shall investigate the complaint and notify the employer and 44
employee of the results of the investigation. 45
(b) An employee receiving less than the wage to which the employee is entitled under 46
this section may recover in a civil action the balance of such wages, together with the costs and 47
attorneys' fees, notwithstanding any agreement to work for a lesser wage. The employee is not 48
required to exhaust administrative remedies before filing the civil action. 49
(c) A civil action pursuant to this section shall be instituted within two years after the 50
date that the alleged violation is discovered by the affected employee." 51
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SECTION 1.2.(b) This section is effective when this act becomes law. 1
2
HEALTHY FAMILIES & WORKPLACES/REQUIRE PAID LEAVE/WORKPLACE 3
HEAT SAFETY PROTECTIONS 4
SECTION 1.3.(a) Chapter 95 of the General Statutes is amended by adding a new 5
Article to read: 6
"Article 3A. 7
"Healthy Families and Healthy Workplaces Act. 8
"§ 95-31.1. Short title and legislative purpose. 9
(a) This Article shall be known and may be cited as the "Healthy Families and Healthy 10
Workplaces Act." 11
(b) The public policy of this State is declared as follows: The health and safety needs of 12
employees and their families and the protection of employees from losing their jobs and pay 13
while they seek medical care for themselves and their family members are subjects of concern 14
requiring legislation to promote the general welfare of the people of the State without 15
jeopardizing the competitive position of North Carolina business and industry . The General 16
Assembly declares that the general welfare of the State requires the enactment of this law under 17
the police power of the State. 18
"§ 95-31.2. Definitions. 19
(a) The following definitions apply in this Article: 20
(1) Child. – A biological, adopted, or foster child, stepchild, legal ward, or child 21
of a parent standing in loco parentis. 22
(2) Domestic violence. – As defined in G.S. 50B-1. 23
(3) Employ. – As defined by G.S. 95-25.2(3). 24
(4) Employee. – As defined by G.S. 95-25.2(4). 25
(5) Employer. – As defined by G.S. 95-25.2(5). 26
(6) Health care provider. – 27
a. A doctor of medicine or osteopathy licensed to practice medicine 28
under federal law, any state law, or the laws of another country 29
wherein the person practices. 30
b. A physician assistant licensed in this State licensed to practice under 31
federal law, any state law, or the laws of another country wherein the 32
person practices. 33
c. A family nurse practitioner or certified nurse midwife licensed to 34
practice under federal law, any state law, or the laws of another 35
country wherein the person practices. 36
(7) Immediate family member. – A child, grandchild, sibling, spouse, domestic 37
partner, civil union partner, parent, or grandparent of an employee, or a 38
spouse, domestic partner, or civil union partner of a parent or grandparent of 39
the employee, or a sibling of a spouse, domestic partner, or civil union partner 40
of the employee, or any other individual related by blood to the employee or 41
whose close association with the employee is the equival ent of a family 42
relationship. 43
(8) Paid sick time or paid sick days. – Time that is (i) compensated at the same 44
hourly rate and with the same benefits, including health care benefits, as the 45
employee normally earns during hours worked and (ii) provided by a n 46
employer to an employee for the purposes described in G.S. 95-31.4(b) of this 47
Article. 48
(9) Parent. – A biological, foster, step, or adoptive parent of an employee or an 49
employee's spouse, or other person who stood in loco parentis during the 50
childhood of an employee or employee's spouse. 51
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(10) Sexual assault. – As defined in Chapter 14 of the General Statutes. 1
(11) Small business. – An employer who employs 10 or fewer employees during 2
20 or more calendar workweeks in the current or preceding calendar year. 3
(12) Stalking. – As defined in Chapter 14 of the General Statutes. 4
"§ 95-31.3. Exemptions. 5
(a) The provisions of this section do not apply to any bona fide volunteers in any 6
organization where an employer-employee relationship does not exist. 7
(b) The provisions of this section do not apply to any person exempted from the Wage 8
and Hour Act under G.S. 95-25.14(a)(2) through (a)(8), 95-25.14(b), 95-25.14(b1), 95-25.14(c), 9
and 95-25.14(e), except that domestic workers are exempted only if they are empl oyed in the 10
place of residence of their employer. 11
"§ 95-31.4. Accrual of paid sick time. 12
(a) Except as provided by G.S. 95-31.3, any employee who works in this State and who 13
must be absent from work for the reasons set forth in G.S. 95-31.5(a) shall be en titled to paid 14
sick time. 15
(b) Paid sick time as provided in this section shall begin to accrue at the commencement 16
of employment. Paid sick time shall accrue at the rate of one hour of pay for every 30 hours 17
worked. Paid sick time may be used as accrued or be loaned by the employer at its discretion to 18
the employee in advance of accrual. Unless the employer and employee agree to designate 19
otherwise, for periods of paid sick time that are less than a normal workday, the time shall be 20
counted on an hourly basis or the smallest increment that the employer 's payroll system uses to 21
account for absences or use of leave. 22
(c) For employees of small businesses, there shall be a limit of 32 hours of accrued paid 23
sick time in a calendar year. For employees of other employers, there shall be a limit of 56 hours 24
of accrued paid sick time in a calendar year. Accrued paid sick time for employees carries over 25
from year to year but is limited to the aforementioned limits. 26
(d) When there is separation from employment and the employee is rehired within 90 27
days of separation by the same employer, previously accrued paid sick time that had not been 28
used shall be reinstated. The employee shall be entitled to use accrued paid sick time and accrue 29
additional sick time at the recommencement of employment. 30
"§ 95-31.5. Use of paid sick time. 31
(a) Paid sick time shall be provided to an employee by an employer for any of the 32
following reasons: 33
(1) To care for the employee's immediate family member who is suffering from a 34
physical or menta l illness, injury, or medical condition that requires care, 35
professional medical diagnosis or care, preventive medical care, or a routine 36
medical appointment. 37
(2) To care for the employee's own physical or mental illness, injury, or medical 38
condition that requires care, professional medical diagnosis or care, preventive 39
medical care, or a routine medical appointment. 40
(3) Absence necessary due to circumstances resulting from the employee, or a 41
family member of the employee, being a victim of stalking or domestic or 42
sexual violence, if the leave is to allow the employee to obtain for the 43
employee or the family member (i) medical attention needed to recover from 44
physical or psychological injury or disability caused by stalking or domestic 45
or sexual violence, (ii) services from a designated domestic violence agency 46
or other victim services organization, (iii) psychological or other counseling, 47
(iv) relocation, or (v) legal services, including obtaining a restraining order or 48
preparing for, or participating in, any civil or criminal legal proceeding related 49
to the stalking or domestic or sexual violence. 50
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(b) An employer may require certification of the qualifying illness, injury, health 1
condition, or violence when a paid sick time period covers more than three consecutive workdays. 2
Any reasonable documentation signed by a health care provider involved in following or treating 3
the illness, injury, or health condition and indicating the need for the amount of sick days taken 4
shall be deemed acceptable certification. A cceptable certification of domestic violence, sexual 5
assault, or stalking may include (i) law enforcement, court, or federal agency records or files, (ii) 6
documentation from a domestic violence or sexual assault program, or (iii) documentation from 7
a religious, medical, or other professional from whom assistance was sought in dealing with the 8
alleged domestic violence, sexual offense, or stalking. 9
(1) The employer shall not require certification from a health care provide r 10
employed by the employer. The employer shall not delay the commencement 11
of time taken for purposes of subsection (a) of this section or pay for this 12
period on the basis that the employer has not yet received the certification. 13
Nothing in this section sha ll be construed to require an employee to provide 14
as certification any information from a health care provider that would be in 15
violation of section 1177 of the Social Security Act or the regulations 16
promulgated pursuant to section 264(c) of the Health Insurance Portability and 17
Accountability Act, 42 U.S.C. § 1320d-2. 18
(2) An employer may not require disclosure of details relating to domestic 19
violence, sexual assault, or stalking or the details of an employee 's medical 20
condition as a condition of providing p aid sick time under this Article. If an 21
employer possesses health information or information pertaining to domestic 22
violence, sexual assault, or stalking about an employee or employee 's 23
immediate family member, such information shall be treated as confiden tial 24
and not disclosed except to the affected employee or with the permission of 25
the affected employee. 26
(c) When the use of paid sick time is foreseeable, the employee shall make a good -faith 27
effort to provide notice of the need for such time to the employ er in advance of the use of the 28
sick time and shall make a reasonable effort to schedule the use of paid sick time in a manner 29
that does not unduly disrupt the operations of the employer. 30
(d) An employer may not require, as a condition of providing paid si ck time under this 31
act, that the employee search for or find a replacement worker to cover the hours during which 32
the employee is on paid sick time. 33
(e) An employer's absence control policy shall not count paid sick time taken under this 34
Article as an absence that may lead to or result in a retaliatory personnel action or any other 35
adverse action. 36
(f) Nothing in this section shall be construed as requiring financial or other 37
reimbursement to an employee from an employer upon the employee's termination, resignation, 38
retirement, or other separation from employment for accrued paid sick days that have not been 39
used. 40
(g) Nothing in this section shall be construed to discourage employers from adopting or 41
retaining paid sick time policies more generous than policies that comply with the requirements 42
of this section, and nothing in this section shall be construed to diminish the obligation of an 43
employer to comply with any contract, collective bargaining agreement, or any employment 44
benefit program or plan tha t provides greater paid sick time leave rights to employees than the 45
rights established under this section. 46
(h) This act provides minimum requirements pertaining to paid sick time and shall not be 47
construed to preempt, limit, or otherwise affect the applic ability of any other law, regulation, 48
requirement, policy, agreement, or standard that provides for greater accrual or use by employees 49
of sick time, whether paid or unpaid, or that extends other protections to employees. 50
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(i) Employers who have a paid time-off leave policy shall not be required to modify that 1
policy, if that policy offers an employee the option, at the employee's discretion, to take paid sick 2
time that is at least equivalent to the amounts and for the same purposes and under the same 3
conditions as provided under this section. 4
"§ 95-31.6. Notification, posting, and records. 5
Employers shall give notice (i) that employees are entitled to paid sick time, (ii) of the amount 6
of paid sick time and the terms of its use guaranteed under this section, (iii) that retaliation against 7
employees who request or use paid sick time is prohibited, and (iv) that each employee has the 8
right to file a complaint with the Commissioner of Labor or in the General Court of Justice if 9
paid sick time as required by this Article is denied by the employer or the employee is retaliated 10
against for requesting or taking paid sick time. Employers may comply with this section by 11
supplying each of their employees with a notice in English and in Spanish that contains the 12
information required by this section or by displaying a poster in a conspicuous and accessible 13
place in each establishment where the employees are employed that contains in English and in 14
Spanish all information required by this section. 15
"§ 95-31.7. Enforcement. 16
(a) The Commissioner shall enforce and administer the provisions of this Article, and the 17
Commissioner or his or her authorized representative is empowered to hold hearings and to 18
institute civil proceedings hereunder. 19
(b) The Commissioner or the Commissioner's authorized representative shall have power 20
to administer oaths and examine witnesses, issue subpoenas, compel the attendance of witnesses 21
and the production of papers, books, accounts, records, payrolls, and documents, and take 22
depositions and affidavits in any proceeding hereunder. 23
(c) Any employer who violates the provisions of this Article shall be liable to the 24
employee or employees affected in the amount of their unpaid sick time, as the case may be, plus 25
interest at the legal rate set forth in G.S. 24-1 from the date each amount first came due. 26
(d) In addition to the amounts awarded pursuant to subsection (c) of this section, the court 27
shall award liquidated damages in an amount equal to the amount found to be due as provided in 28
subsection (c) of this section, provided that if the employer shows to the satisfaction of the court 29
that the act or omission constituting the violation was in good faith and that the employer had 30
reasonable grounds for believing that the act or omission was not a violati on of this Article, the 31
court may, in its discretion, award no liquidated damages or may award any amount of liquidated 32
damages not exceeding the amount found due as provided in subsection (c) of this section. 33
(e) Action to recover such liability may be maintained in the General Court of Justice by 34
any one or more employees. 35
(f) The court, in any action brought under this Article, may, in addition to any judgment 36
awarded to the plaintiff, order costs and fees of the action and reasonable attorneys ' fees to be 37
paid by the defendant. The court may order costs and fees of the action and reasonable attorneys' 38
fees to be paid by the plaintiff if the court determines that the action was frivolous. 39
(g) The Commissioner may determine and supervise the payment of the amounts due 40
under this section, including interest at the legal rate set forth in G.S. 24-1 from the date each 41
amount first came due, and the agreement to accept such amounts by the employee shall 42
constitute a waiver of the employee's right to bring an action under subsection (e) of this section. 43
(h) Actions under this Article must be brought within two years pursuant to G.S. 1-53. 44
(i) The rights and remedies created by this Article are supplementary to all existing 45
common-law and statutory rights and remedies. 46
"§ 95-31.8. Rules. 47
The Commissioner of Labor shall adopt rules to implement this Article. 48
"§ 95-31.9. Severability. 49
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The provisions of this Article shall be severable, and if any phrase, clause, sentence, or 1
provision is declared to be invalid or is preempted by federal law or regulation, the validity of 2
the remainder of this Article shall not be affected thereby." 3
SECTION 1.3.(b) G.S. 95-241(a) reads as rewritten: 4
"(a) No person shall discriminate or take any retaliatory action against an employee 5
because the employee in good faith does or threatens to do any of the following: 6
(1) File a claim or complaint, initiate any inquiry, investigation, inspection, 7
proceeding or other action, or testify or provide information to any person 8
with respect to any of the following: 9
a. Chapter 97 of the General Statutes. 10
b. Article 2A Article 2A, Article 3A, or Article 16 of this Chapter. 11
c. Article 2A of Chapter 74 of the General Statutes. 12
d. G.S. 95-28.1. 13
e. Article 16 of Chapter 127A of the General Statutes. 14
f. G.S. 95-28.1A. 15
g. Article 52 of Chapter 143 of the General Statutes. 16
h. Article 5F of Chapter 90 of the General Statutes. 17
(2) Cause any of the activities listed in subdivision (1) of this subsection to be 18
initiated on an employee's behalf. 19
(3) Exercise any right on behalf of the employee or any other employee afforded 20
by Article 2A Article 2A, Article 3A, or Article 16 of this Chapter, by Article 21
2A of Chapter 74 of the General Statutes, or by Article 52 of Chapter 143 of 22
the General Statutes. 23
(4) Comply wi th the provisions of Article 27 of Chapter 7B of the General 24
Statutes. 25
(5) Exercise rights under Chapter 50B. Actions brought under this subdivision 26
shall be in accordance with the provisions of G.S. 50B-5.5." 27
SECTION 1.3.(c) This section becomes effective January 1, 2026, and applies only 28
to covered employment on or after that date. With respect to employees covered by a valid 29
collective bargaining agreement in effect on January 1, 2026, this section shall not apply until 30
the stated expiration date in the collective bargaining agreement; however, this section shall apply 31
upon any such agreement's renewal, extension, amendment, or modification in any respect after 32
January 1, 2026. 33
SECTION 1.4. Article 16 of Chapter 95 of the General Statutes is amended by 34
adding two new sections to read: 35
"§ 95-158. Workplace safety requirements. 36
(a) Heat Exposure Safety. – Each employer shall adopt a heat safety plan for employees 37
that, at a minimum, does all of the following: 38
(1) Provide workers with readily accessible drinking water. 39
(2) Establish and maintain shaded or climate-controlled rest areas. 40
(3) Implement mandatory rest periods during high-heat conditions. 41
(4) Develop and implement written heat illness prevention procedures. 42
(5) Provide heat safety training to workers and supervisors. 43
(6) Maintain records of heat-related incidents and prevention measures. 44
(7) Implement an acclimatization schedule for new workers and workers 45
returning after 30 or more consecutive days away. 46
When temperatures exceed 90 degrees Fah renheit for more than 15 minutes during a 47
60-minute period, or where employees are performing a heavy workload or are required to wear 48
double-layer woven clothing, employers shall modify work schedules to minimize heat exposure, 49
increase rest frequency, es tablish a mandatory buddy system, and maintain communication 50
systems for heat-related emergency response. 51
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(b) Natural Disaster and Evacuation Safety. – Each employer shall adopt a safety plan in 1
the event of natural disaster or evacuation to provide for employee readiness, health, and safety. 2
(c) Rules. – The Commissioner of Labor shall adopt rules to implement this section. 3
"§ 95-159. Employee rights in an emergency. 4
(a) The following definitions apply in this section: 5
(1) Emergency condition. – The existence of either of the following: 6
a. Conditions of disaster or extreme peril to the safety of persons or 7
property at the workplace or worksite caused by natural forces or a 8
criminal act. 9
b. An order to evacuate a workplace, a worksite, a worker's home, or the 10
school of a worker's child due to natural disaster or a criminal act. 11
The term does not include a health pandemic. 12
(2) A reasonable belief that the workplace or worksite is unsafe . – When a 13
reasonable person, under the circumstances known to the em ployee at the 14
time, would conclude there is a real danger of death or serious injury if that 15
person enters or remains on the premises. The existence of any health and 16
safety regulations specific to the emergency condition and an employer 's 17
compliance or noncompliance with those regulations shall be a relevant factor 18
if this information is known to the employee at the time of the emergency 19
condition or the employee received training on the health and safety 20
regulations mandated by law specific to the emergency condition. 21
(b) In the event of an emergency condition, an employer shall not: 22
(1) Take or threaten adverse action against any employee for refusing to report to, 23
or leaving, a workplace or worksite within the affected area because the 24
employee has a reasonable belief that the workplace or worksite is unsafe; or 25
(2) Prevent any employee from accessing the employee 's mobile device or other 26
communications device for seeking emergency assistance, assessing the 27
safety of the situation, or communicating with a person to verify their safety. 28
(c) The provisions of subsection (b) of this section do not apply to any of the following: 29
(1) A first responder, disaster service worker, or any employee required by law to 30
render aid or remain on the premises in case of an emergency. 31
(2) An employee or contractor of a health care facility who provides direct patient 32
care, provides services supporting patient care operations during an 33
emergency, o r is required by law or policy to participate in emergency 34
response or evacuation. 35
(3) An employee of a private entity that contracts with the State or a local political 36
subdivision of the State for purposes of providing or aiding in emergency 37
services. 38
(4) An employee working on a military base or in the defense industrial base 39
sector. 40
(5) An employee performing essential work on nuclear reactors or nuclear 41
materials or waste. 42
(6) An employee of a company providing utility, communications, energy, or 43
roadside assistance while the employee is actively engaged in or is being 44
called upon to aid in emergency response, including maintaining public access 45
to services such as energy and water during the emergency. 46
(7) An employee of a licensed residential care facility. 47
(8) An employee of a depository institution or any com pany within any of the 48
definitions of "insured depository institution" set forth in 12 U.S.C. § 1813(c). 49
(9) A transportation employee participating directly in emergency evacuations 50
during an active evacuation. 51
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(10) An employee of a privately contracted private fire prevention resource. 1
(11) An employee whose primary duties include assisting members of the public 2
to evacuate in case of an emergency. 3
(12) An employee of any correctional facility. 4
(d) When feasible, an employee shall notify the employer of the emergency condition 5
requiring the employee to leave or refuse to report to the workplace or worksite prior to leaving 6
or refusing to report. When prior notice is not feasible, the employee shall notify the employer 7
of the emergency condition that required the employee to leave or refuse to report to the 8
workplace or worksite after leaving or refusing to report as soon as possible. 9
(e) This section does not to apply when emergency conditions that pose an imminent and 10
ongoing risk of harm to the workplace, the worksite, the worker, or the worker 's home have 11
ceased. 12
(f) The Commissioner of Labor may bring an enforcement action under this section upon 13
a complaint by a current or former employee. 14
(g) The employee has a private right of action against an employer who violate s this 15
section when the violation results in actual harm to the employee. The employer shall have the 16
right to cure alleged violations before any action by a current or former employee may be brought 17
under this section." 18
19
INCREASE TIPPED MINIMUM WAGE 20
SECTION 1.5.(a) Effective until December 31, 2025, G.S. 95-25.3(f) reads as 21
rewritten: 22
"(f) Tips earned by a tipped employee may be counted as wages only up to the amount 23
permitted in section 3(m) of the Fair Labor Standards Act, 29 U.S.C. 203(m), if the tipped 24
employee is notified in advance, is permitted to retain all tips and the employer maintains 25
accurate and complete records of tips received by each employee as such tips are certified by the 26
employee monthly or for each pay period. Even if the employee refuses to certify tips accurately, 27
tips may still be counted as wages when the employer complies with the other requirements of 28
this section and can demonstrate by moni toring tips that the employee regularly receives tips in 29
the amount for which the credit is taken. of five dollars ($5.00) per hour. Tip pooling shall also 30
be is permissible among employees who customarily and regularly receive tips; however, no 31
employee's tips may be reduced by more than fifteen percent (15%) under a tip pooling 32
arrangement." 33
SECTION 1.5.(b) Effective January 1, 2026, G.S. 95-25.3(f), as amended by 34
subsection (a) of this section, reads as rewritten: 35
"(f) Tips earned by a tipped employee may be counted as wages only up to the amount of 36
five dollars ($5.00) per hour. shall not be counted as wages. Tip pooling is permissible among 37
employees who customarily and regularly receive tips; however, no employee's tips may be 38
reduced by more than fifteen percent (15%) under a tip pooling arrangement." 39
SECTION 1.5.(c) Except as otherwise provided, this section is effective when this 40
act becomes law. 41
42
WAGE THEFT 43
SECTION 1.6.(a) G.S. 95-25.2 reads as rewritten: 44
"§ 95-25.2. Definitions. 45
In this Article, unless the context otherwise requires: The following definitions apply in this 46
Article: 47
(1) "Agriculture" includes farming Agriculture. – Farming in all its branches 48
performed by a farmer or on a farm as an incident to or in conjunction with 49
farming operations. 50
(2) "Commissioner" means the Commissioner. – The Commissioner of Labor. 51
General Assembly Of North Carolina Session 2025
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(3) "Employ" means to Employ. – To suffer or permit to work. 1
(4) "Employee" includes any Employee. – Any individual employed by an 2
employer. 3
(5) "Employer" includes any Employer. – Any person acting directly or indirectly 4
in the interest of an employer in relation to an employee. 5
(5a) Employment status. – The status of an individual, under the usual 6
common-law rules applicable in determining the employee -employer 7
relationship, as an employee or as an independent contractor (or another 8
individual who is not an employee). 9
(5b) Enterprise. – The related activities performed either through unified 10
operations or common control by any person or persons for a common 11
business purpose and includes all such activities whether performed in one or 12
more establishments or by one or more corporate units but shall not include 13
the related activities performed for such enterprise by an independent 14
contractor or franchisee. 15
(6) "Establishment" means a Establishment. – A physical location where business 16
is conducted. 17
(7) "The Fair Labor Standards Act " means the Fair Labor Standards Act. – The 18
Fair Labor Standards Act of 1938, as amended and as the same may be 19
amended from time to time by the United States Congress. 20
(8) "Hours worked " includes all Hours worked. – All time an employee is 21
employed. 22
(8a) Intentional. – The employer consciously committed the act which violated the 23
statute. 24
(9) "Payday" means that Payday. – That day designated for payment of wages due 25
by virtue of the employment relationship. 26
(10) "Pay periods " may Pay periods. – May be daily, weekly, biweekly, 27
semimonthly, or monthly. 28
(11) "Person" means an Person. – An individual, partnership, association, 29
corporation, business t rust, legal representative, or any organized group of 30
persons. For the purposes of G.S. 95-25.2, G.S. 95-25.3, G.S. 95-25.14, and 31
G.S. 95-25.20, it also means the State of North Carolina, any city, town, 32
county, or municipality, or any State or local agenc y or instrumentality of 33
government. The Government of the United States and any agency of the 34
United States (including the United States Postal Service and Postal Rate 35
Commission) are not included as persons for any purpose under this Article. 36
(12) "Seasonal food service establishment " means a Seasonal food service 37
establishment. – A restaurant, food and drink stand or other establishment 38
generally recognized as a commercial food service establishment, preparing 39
and serving food to the public but operating 180 days or less per year. 40
(13) "Seasonal religious or nonprofit educational conference center or a seasonal 41
amusement or recreational establishment " means an Seasonal religious or 42
nonprofit educational conference center or a seasonal amusement o r 43
recreational establishment. – An establishment which does not operate for 44
more than seven months in any calendar year, or during the preceding calendar 45
year had average receipts for any six months of such year of not more than 46
thirty-three and one -third percent (33 1/3%) of its average receipts for the 47
other six months of that year. 48
(14) "Tipped employee " means any Tipped employee. – Any employee who 49
customarily receives more than twenty dollars ($20.00) a month in tips. 50
General Assembly Of North Carolina Session 2025
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(15) "Tip" shall mean any Tip. – Any money or part thereof over and above the 1
actual amount due a business for goods, food, drink, services or articles sold 2
which is paid in cash or by credit card, or is given to or left for an employee 3
by a patron or patrons of the business where the employee is employed. 4
(16) "Wage" Wage. – Wage paid to an employee means compensation for labor or 5
services rendered by an employee whether determined on a time, task, piece, 6
job, day, commission, or other basis of calculation, and the reasonable cost as 7
determined by the Commissioner of furnishing employees with board, 8
lodging, or other facilities. For the purposes of G.S. 95-25.6 through 9
G.S. 95-25.13 "wage" includes sick pay, vacation pay, severance pay, 10
commissions, bonuses, and other amounts promised when the employer has a 11
policy or a practice of making such payments. 12
(16a) Willful. – The employer knew or showed reckless disregard for the issue of 13
whether the employer's conduct was prohibited. 14
(17) "Workweek" means any Workweek. – Any period of 168 consecutive hours. 15
(18) "Enterprise" means the related activities performed either through unified 16
operations or common control by any person or persons for a common 17
business purpose and includes all such activities whether performed in one or 18
more establishments or by one or more corporate units but shall not include 19
the related activities performed for such enterprise by an independent 20
contractor or franchisee." 21
SECTION 1.6.(b) G.S. 95-25.13 reads as rewritten: 22
"§ 95-25.13. Notification, posting, and records. 23
Every employer shall do all of the following: 24
(1) Notify its employees, in writing at the time of hiring, and upon any material 25
change, of the following information: 26
a. The amount of the promised wages and the day and place for 27
payment.basis upon which the promised wages will be calculated (for 28
example, per hour or per piece). 29
b. The method, day, and place for payment of wages. 30
c. The full name, mailing address, and telephone number of the employer 31
and the federal and State tax identification number of each employer 32
who is not a natural person. 33
d. The employment status of the employee. Such notification or 34
classification by the employer is not determinative of the employee 's 35
actual employment status. 36
(2) Make available to its employees, in writing or through a posted notice 37
maintained in a place accessible to its employees, employment practices and 38
policies with regard to promised wages. 39
(3) Notify employees, in writing, at least one pay period prior to any changes in 40
promised wages. Wages m ay be retroactively increased without the prior 41
notice required by this subsection. 42
(4) Furnish each employee with an itemized statement of deductions made from 43
that employee's wages under G.S. 95-25.8 and with the information required 44
by 13 NCAC 12 .0801(6) and 13 NCAC 12 .0801(8) through (13 ) for each 45
pay period such deductions are made.period." 46
SECTION 1.6.(c) G.S. 95-25.22 reads as rewritten: 47
"§ 95-25.22. Recovery of unpaid wages. 48
(a) Any employer who violates the provisions of G.S. 95-25.3 (Minimum W age), 49
G.S. 95-25.4 (Overtime), or G.S. 95-25.6 through 95 -25.12 (Wage Payment) shall be liable to 50
the employee or employees affected in the amount of their unpaid minimum wages, their unpaid 51
General Assembly Of North Carolina Session 2025
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overtime compensation, or their unpaid amounts due under G.S. 95-25.6 through G.S. 95-25.12, 1
as the case may be, plus interest at the legal rate set forth in G.S. 24-1, from the date each amount 2
first came due. 3
(a1) In addition to the amounts awarded pursuant to subsection (a) of this section, the court 4
shall award liqu idated damages in an amount equal to twice the amount found to be due as 5
provided in subsection (a) of this section, provided that if the employer shows to the satisfaction 6
of the court that the act or omission constituting the violation was in good faith and that the 7
employer had reasonable ground s for believing that the act or omission was not a violation of 8
this Article, the court may, in its discretion, award no liquidated damages or may award any 9
amount of liquidated damages not exceeding twice the amount found due as provided in 10
subsection (a) of this section. 11
(a2) Any employer who violates the provisions of G.S. 95-25.13 or any rule adopted under 12
that section shall be liable to the employee or employees affected in the amount of their actual 13
damages, including, but not limited to, lost wages and benefits plus interest. 14
(a3) In addition to the amounts awarded pursuant to subsections (a), (a1), and (a2) of this 15
section, if the court finds that the employer has intentionally violated any provision of this Article 16
or any regulation issued pursuant to this Article, the court shall award statutory damages of up to 17
five hundred dollars ($500.00) per employee per violation. Factors to be considered in setting the 18
number of statutory damages include the nature and persistence of the violations and the ex tent 19
of the employer's culpability. 20
(b) Action to recover such liability may be maintained in the General Court of Justice by 21
any one or more employees. 22
(c) Action to recover such liability may also be maintained in the General Court of Justice 23
by the Commissioner at the request of the employees affected. Any sums thus recovered by the 24
Commissioner on behalf of an employee shall be held in a special deposit account and shall be 25
paid directly to the employee or employees affected. 26
(d) The court, in any a ction brought under this Article may, shall, in addition to any 27
judgment awarded plaintiff, order costs and fees of the action and reasonable attorneys' fees to 28
be paid by the defendant. In an action brought by the Commissioner in which a default judgment 29
is entered, the clerk shall order attorneys' fees of three hundred dollars ($300.00) to be paid by 30
the defendant. 31
The court may order costs and fees of the action and reasonable attorneys' fees to be paid by 32
the plaintiff if the court determines that the action was frivolous. 33
(e) The Commissioner is authorized to determine and supervise the payment of the 34
amounts due under this section, including interest at the legal rate set forth in G.S. 24-1, from the 35
date each amount first came due, and the agreement t o accept such amounts by the employee 36
shall constitute a waiver of the employee's right to bring an action under subsection (b) of this 37
section. 38
(f) Actions under this section must be brought within two years pursuant to 39
G.S. 1-53.G.S. 1-53, except that an action arising out of a willful violation may be brought within 40
three years. Actions may also be brought within one year after notification to the employee of 41
final disposition by the State of a complaint for the same violation. 42
(g) Prior to initiating an y action under this section, the Commissioner shall exhaust all 43
administrative remedies, including giving the employer the opportunity to be heard on the matters 44
at issue and giving the employer notice of the pending action." 45
SECTION 1.6.(d) G.S. 95-25.23 reads as rewritten: 46
"§ 95 -25.23. Violation of provisions on minimum wage, overtime, wage payment, 47
withholding of wages, notification, and youth employment; civil penalty. 48
(a) Any employer who violates the provisions of G.S. 95-25.5 G.S. 95-25.3 (Minimum 49
Wage), 95 -25.4 (Overtime), 95-25.5 (Youth Employment) Employment), 95 -25.6 (Wage 50
Payment), or 95-25.13 (Notification), or any regulation issued thereunder, shall be subject to a 51
General Assembly Of North Carolina Session 2025
Senate Bill 326-First Edition Page 13
civil penalty not to exceed five hundred dollars ($500.00) for the first violation and not to exceed 1
one thousand dollars ($1,000) for each subsequent violation. In determining the amount of such 2
penalty, the appropriateness of such penalty to the size of the business of the person charged and 3
the gravity of the violation shall be considered. The determination by the Commissioner shall be 4
final, unless within 15 days after receipt of notice thereof by certified mail with return receipt, 5
by signature confirmation as provided by the U.S. Postal Service, by a designated delivery service 6
authorized pursuant to 26 U.S.C. § 7502(f)(2) with delivery receipt, or via hand delivery, the 7
person charged with the violation takes exception to the determination, in which event final 8
determination of the penalty shall be made in an administrative proceeding pursuant to Article 3 9
of Chapter 150B and in a judicial proceeding pursuant to Article 4 of Chapter 150B. 10
(b) The amount of such penalty when finally determined may be recovered in the manner 11
set forth in G.S. 95-25.23B. 12
(c) The clear proceeds of civil penalties provided for in this section shall be remitted to 13
the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 14
(d) Assessment of penalties under this section shall be subject to a two-year three-year 15
statute of limitations commencing at the time of the occurrence of the violation." 16
SECTION 1.6.(e) Article 2A of Chapter 95 of the General Statutes is amended by 17
adding a new section to read: 18
"§ 95-25.23D. Wage claims; liens; collections. 19
(a) For the purposes of wage claims and collections under this Article, an employee is 20
entitled to a lien upon: 21
(1) All property of the employer, real or personal, located in this State; and 22
(2) All property upon which the employee has performed work at the ins istence 23
of the owner or of any person acting by the employer's authority or under the 24
owner as contractor or otherwise, for the full amount of the wages and any 25
statutory penalties owed. 26
(b) Both a wage claim and an action to enforce a lien under this section may be brought 27
by the employee individually or by the Commissioner, or any representative of the employee on 28
behalf of the employee, including collective bargaining representatives. 29
(c) If no lien has been recorded at the time the employee files the complaint with the 30
Commissioner, the Commissioner shall record and provide notice of the lien on behalf of the 31
employee. 32
(d) Any number of wage claims or wage deficiencies against the same employer may be 33
joined in a single proceeding, but the court may order separate trials or hearings. If the proceeds 34
of the sale of the property subject to a lien are insufficient to pay all the claimants, whether or 35
not such claims have been joined together, the court shall order the claimants to be paid in 36
proportion to the amount due each claimant. 37
(e) An employee's lien upon personal property shall be limited to such property as can be 38
made subject to a security interest under the Commercial Code by the filing of a financing 39
statement. 40
(f) In order to enforce a lien un der this section upon real property, a claim of lien must 41
be recorded with the county recorder in the county where the property is located, as follows: 42
(1) The claim shall include all of the applicable information set forth under 43
G.S. 44A-12. 44
(2) The notic e of lien shall be served on the property owner in the manner 45
prescribed by G.S. 44A-11. 46
A lien under this section is perfected as soon as notice is provided as required by this 47
subsection. 48
(g) In order to enforce a lien under this section upon personal pr operty, the 49
Commissioner, employee representative, or employee shall file the notice of the lien in the office 50
of the Secretary of State and serve a copy of the notice by personal service to the employer in the 51
General Assembly Of North Carolina Session 2025
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same manner as a summons or by mail. The office of the Secretary of State shall place the notice 1
of the lien in the same file as the financing statements pursuant to G.S. 25-9-310. The notice shall 2
specify the nature and amount of the claim, describe the property on which the lien is made, and 3
state that the person filing the notice claims a lien on that property. 4
(h) The lien may be filed at any time prior to the expiration of the statute of limitations 5
for a wage claim on the same wages pursuant to G.S. 95-25.22(f). 6
(i) Mistakes or errors in the claimed amount owed shall not invalidate the lien unless 7
made with the intent to defraud. 8
(j) If a lien is recorded pursuant to subsection (f) of this section and an action to recover 9
unpaid wages has been filed, then that action shall also be deemed an ac tion to foreclose upon 10
any property subject to the recorded lien. In the judgment resulting from such an action, the court 11
may order the sale at sheriff's auction or the transfer to the plaintiff of title or possession of any 12
property subject to the lien. Whether or not the court makes such an order as part of the judgment, 13
a writ of sale may be issued for any property subject to the lien at any point after a judgment for 14
unpaid wages is issued. 15
(k) If judgment is entered in favor of the employer in an action for unpaid wages or if the 16
case is dismissed with prejudice, the lien shall be extinguished upon expiration of the applicable 17
appeals period if no appeal is filed. If an appeal is filed, the lien shall continue in force until all 18
issues on appeal have been decided. 19
(l) If an action to recover the wages is not brought within one year of the filing of the 20
lien, the lien created by this section shall be extinguished. 21
(m) A lien recorded pursuant to subsection (f) of this section takes precedence over all 22
other debts, judgments, decrees, liens, or mortgages against the employer, regardless as to 23
whether these debts, judgments, decrees, liens, or mortgages originate before or after the wage 24
lien, and regardless of whether these debts, judgments, decrees, lie ns, or mortgages were 25
perfected prior to the wage lien. An employee's lien is effective against the employer, the estate 26
of the employer, or a subsequent bona fide purchaser of the property subject to the employee 's 27
lien. 28
(n) The employee, the Commissioner, or the employee's representative, as assignee of the 29
employee, is entitled to court costs and reasonable attorneys' fees for filing a successful action to 30
foreclose a lien pursuant to this section." 31
SECTION 1.6.(f) This section is effective when this act becomes law and applies to 32
employers and employees on or after that date. 33
34
"BAN THE BOX" 35
SECTION 1.7.(a) Chapter 126 of the General Statutes is amended by adding a new 36
Article to read: 37
"Article 17. 38
"Fair Assessment of Persons with Criminal Histories. 39
"§ 126-100. Definitions. 40
The following definitions apply in this Article: 41
(1) Criminal history. – A State or federal history of conviction of a crime, whether 42
a misdemeanor or felony, that bears upon an applicant 's fitness for public 43
employment. The term does not include a record of arrest not resulting in 44
conviction. 45
(2) Hiring authority. – The agent responsible by law for the hiring of persons for 46
public employment. 47
(3) Public employment. – Any job, work for pay, or employment, including 48
temporary or seasonal work, where the employer is the State of North Carolina 49
or any local political subdivision of the State. 50
"§ 126-101. Consideration of applicant criminal history. 51
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Senate Bill 326-First Edition Page 15
A hiring authority may not inquire into or consider the criminal history of an applican t for 1
public employment, or include any such inquiry on any initial employment application form, 2
until the hiring authority has made a conditional offer of employment to the applicant. This 3
Article is not applicable to positions for which a hiring authority is otherwise required by law to 4
consider the criminal record; however, nothing in this Article shall be construed to preclude any 5
hiring authority in its discretion from adopting the provisions of this Article. 6
"§ 126-102. Criteria for disqualification. 7
(a) Except as otherwise required by law, no person shall be disqualified from public 8
employment solely or in part because of a prior conviction, unless the conviction is determined 9
to be substantially related to the qualifications, functions, or duties of the position after 10
consideration of all of the following factors: 11
(1) The level and seriousness of the crime. 12
(2) The date of the crime. 13
(3) The age of the person at the time of the conviction. 14
(4) The circumstances surrounding the commission of the crime, if known. 15
(5) The nexus between the criminal conduct and the duties of the position. 16
(6) The prison, jail, probation, parole, rehabilitation, and employment records of 17
the person since the date the crime was committed. 18
(7) The subsequent commission of a crime by the person. 19
(b) A record of arrest not resulting in conviction may not be the basis for disqualification 20
from public employment. 21
"§ 126-103. Opportunity to provide evidence of inaccuracy. 22
The hiring authority must inform the individual of the potential adverse employment decision 23
based on the background check report prior to a final decision and must provide an opportunity 24
to demonstrate that the individual was not correctly identified in the background check report or 25
that the report is otherwise inaccurate. 26
"§ 126-104. Data collection. 27
The State Human Resources Commission shall do the following: 28
(1) Record and log the positions that are statutorily required to conduct 29
background checks prior to a conditional offer of employment. 30
(2) Conduct quar terly reviews to determine compliance with this Article and 31
make a report on all such reviews to the General Assembly annually. 32
(3) Collect, and make available to the public, data on: 33
a. The number of applicants for public employment with criminal 34
histories given conditional offers of employment. 35
b. The number of applicants for public employment with criminal 36
histories who are subsequently employed. 37
c. The retention rate of public employees with criminal histories. 38
"§ 126-105. Applicability. 39
The provisions of this Article apply to all applicants for public employment." 40
SECTION 1.7.(b) G.S. 126-5 is amended by adding a new subsection to read: 41
"(c19) Notwithstanding any other provision of law, the provisions of Article 17 of this 42
Chapter apply as to applican ts for employment with the State or any local political subdivision 43
of the State." 44
SECTION 1.7.(c) This section is effective when this act becomes law and applies to 45
applications for employment made on or after that date. 46
47
REPEAL OF PUBLIC EMPLOYEE COLLECTIVE BARGAINING RESTRICTION 48
SECTION 1.8.(a) G.S. 95-98 reads as rewritten: 49
"§ 95-98. Contracts between units of government and labor unions, trade unions or labor 50
organizations concerning public employees declared to be illegal. 51
General Assembly Of North Carolina Session 2025
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Any agreement, or contract, between the governing authority of any city, town, county, or 1
other municipality, or between any agency, unit, or instrumentality thereof, or between any 2
agency, instrumentality, or institution of the State of North Carolina, and any labor union, trade 3
union, or labor organization, as bargaining agent for any public employees of such city, town, 4
county or other municipality, or agency or instrumentality of government, is hereby declared to 5
be against the public policy of the State, illegal, unlawful, void and of no effect." 6
SECTION 1.8.(b) This section is effective when this act becomes law. 7
8
EARNED INCOME TAX CREDIT 9
SECTION 1.9.(a) G.S. 105-151.31 is reenacted as it existed immediately before its 10
expiration and reads as rewritten: 11
"§ 105-151.31. Earned income tax credit. 12
(a) Credit. – An individual who claims for the taxable year an earned income tax credit 13
under section 32 of the Code is allowed a credit against the tax imposed by this Part equal to a 14
percentage five percent (5%) of the amount of credit the individual qualified for under section 15
32 of the Code. A nonresident or part-year resident who claims the credit allowed by this section 16
must reduce the amount of the credit by multiplying it by the fraction calculated under 17
G.S. 105-134.5(b) or (c), as appropriate. The percentage is as follows: 18
(1) For taxable year 2013, four and one-half percent (4.5%). 19
(2) For all other taxable years, five percent (5%). 20
(b) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 21
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 22
must refund the excess to the taxpayer. The refundable excess is gover ned by the provisions 23
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. Section 24
3507 of the Code, Advance Payment of Earned Income Credit, does not apply to the credit 25
allowed by this section. In computing the amount of tax against which multiple credits are 26
allowed, nonrefundable credits are subtracted before refundable credits. 27
(c) Sunset. – This section is repealed effective for taxable years beginning on or after 28
January 1, 2014." 29
SECTION 1.9.(b) This section is effe ctive for taxable years beginning on or after 30
January 1, 2025. 31
32
TAX CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES 33
SECTION 1.10.(a) Article 4 of Chapter 105 of the General Statutes is amended by 34
adding a new section to read: 35
"§ 105-151.34. Credit for qualified child and dependent care expenses. 36
(a) Credit. – A person who is allowed a credit against federal income tax for a percentage 37
of employment-related expenses under section 21 of the Code shall be allowed as a credit against 38
the tax imposed by this Part an amount equal to one hundred percent (100%) of the amount of 39
the credit provided for in section 21 of the Code which is claimed and allowed pursuant to the 40
Internal Revenue Code. To claim the credit allowed by this section, the taxpayer must provid e 41
with the tax return the information required by the Secretary of Revenue. 42
(b) Phaseout. – The credit allowed by this section shall be reduced by a percentage listed 43
below, rounded to the nearest percentage point, based on the taxpayer's adjusted gross income as 44
calculated under the Code: 45
46
Filing Status For AGI Exceeding Percentage Reduction 47
Married, filing jointly $75,000 The lesser of 100% or 48
[(Taxpayer's AGI – $75,000)/$125,000] 49
Head of Household $56,250 The lesser of 100% or 50
[(Taxpayer's AGI – $56,250)/$93,750] 51
General Assembly Of North Carolina Session 2025
Senate Bill 326-First Edition Page 17
Single $37,500 The lesser of 100% or 1
[(Taxpayer's AGI – $37,500)/$62,500] 2
3
(c) Limitations. – A nonresident or part -year resident who claims the credit allowed by 4
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 5
G.S. 105-153.4(b) or (c), as appropriate. The credit allowed by this section may not exceed the 6
amount of t ax imposed by this Part for the taxable year reduced by the sum of all credits 7
allowable, except for payments of tax made by or on behalf of the taxpayer." 8
SECTION 1.10.(b) Subsection (a) of this section is effective for taxable years 9
beginning on or after January 1, 2025. 10
11
UNEMPLOYMENT INSURANCE BENEFITS INCREASES 12
SECTION 2.1.(a) G.S. 96-14.2(a) reads as rewritten: 13
"(a) Weekly Benefit Amount. – The weekly benefit amount for an individual who is totally 14
unemployed is an amount equal to the wages paid to t he individual in the last two completed 15
quarters highest paid quarter of the individual's base period divided by 52 and rounded to the 16
next lower whole dollar. If this amount is less than fifteen dollars ($15.00), the individual is not 17
eligible for benefits. The weekly benefit amount may not exceed three hundred fifty dollar s 18
($350.00).six hundred eighty dollars ($680.00)." 19
SECTION 2.1.(b) This section is effective for benefit weeks beginning on or after 20
April 1, 2025. 21
SECTION 2.2. G.S. 96-14.3 reads as rewritten: 22
"§ 96-14.3. Duration of benefits. 23
(a) Duration. – The number of weeks an individual is allowed to receive unemployment 24
benefits depends on the seasonal adjusted statewide unemployment rate that applies to the 25
six-month base period in which the claim is filed. One six-month base period begins on January 26
1 and one six-month base period begins on July 1. For the base period that begins January 1, the 27
average of the seasonal adjusted unemployment rates for the State for the preceding months of 28
July, August, and September applies. For the base period that begins Ju ly 1, the average of the 29
seasonal adjusted unemployment rates for the State for the preceding months of January, 30
February, and March applies. The Division must use the most recent seasonal adjusted 31
unemployment rate determined by the U.S. Department of Labor, Bureau of Labor Statistics, and 32
not the rate as revised in the annual benchmark. 33
Seasonal Adjusted Number 34
Unemployment Rate of Weeks 35
Less than or equal to 5.5% 12 36
Greater than 5.5% up to 6% 13 37
Greater than 6% up to 6.5% 14 38
Greater than 6.5% up to 7% 15 39
Greater than 7% up to 7.5% 16 40
Greater than 7.5% up to 8% 17 41
Greater than 8% up to 8.5% 18 42
Greater than 8.5% up to 9% 19 43
Greater than 9% 20 44
(a1) Maximum Duration. – An eligible individual is entitled to receive unemployment 45
benefits for a maximum period of 26 weeks, unless the benefit period is extended expressly by 46
State or federal law. 47
(b) Total Benefits. – The total benefits paid to an individual equals the individual's 48
weekly benefit amount allowed under G.S. 96-14.2 multiplied by the number of weeks allowed 49
under subsection (a) of this section.26." 50
General Assembly Of North Carolina Session 2025
Page 18 Senate Bill 326-First Edition
SECTION 2.3. The Legislative Research Commission (LRC) shall study expanding 1
the State's employment security system to cover self-employed workers who are laid off or have 2
hours reduced due to an economic downturn. For the purposes of this review, the term 3
"self-employed worker" means an individual who has a contract or arrangement to perform work 4
or services. The term includes, but is not limited to, app -based ride -share and food delivery 5
drivers, freelancers, and other similar "gig economy" workers. 6
The LRC shall report its findings and any legislative proposals to the 2026 Session of 7
the 2025 General Assembly. 8
9
PANDEMIC/OCCUPATIONAL DISEASE PRESUMPTION 10
SECTION 3.1.(a) G.S. 97-53 reads as rewritten: 11
"§ 97 -53. Occupational diseases enumerated; when due to exposure to chemicals. and 12
conditions enumerated. 13
The following diseases and conditions only shall be deemed to be occupational diseases 14
within the meaning of this Article: 15
… 16
(30) Pandemic infection contracted by a covered person. – A pandemic infection 17
contracted by a covered person shall be presumed to be due to exposure in the 18
course of the covered person 's employment. The presumption may only be 19
rebutted by clear and convincing evidence. The following definitions apply in 20
determining eligibility for compensation under this subdivision: 21
a. Covered person. – Means (i) a law enforcement officer, jailer, prison 22
guard, firefighter, or an emergency medical technician or paramedic 23
employed by a State or local governmental employer , including a 24
volunteer firefighter meeting the requirement s of G.S. 58-84-5(3a), 25
(ii) a health care worker, or (iii) an employee required to work during 26
a pandemic for a business declared essential by executive order of the 27
Governor or by order of a local governmental authority, including food 28
service, retail, and other essential personnel. 29
b. Pandemic. – An outbreak of a n emerging disease prevalent in the 30
United States or the whole world. 31
…." 32
SECTION 3.1.(b) This section is effective when this act becomes law and applies 33
to claims for workers' compensation benefits filed on or after that date. 34
35
COST-OF-LIVING ADJUSTMENT FOR RETIREES OF THE TEACHERS' AND 36
STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLID ATED JUDICIAL 37
RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, AND THE 38
LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM 39
SECTION 4.1.(a) G.S. 135-5 is amended by adding a new subsection to read: 40
"(aaaa) Effective July 1, 202 5, the retirement allowance payable to, or on account of, 41
beneficiaries whose retirement commenced on or before July 1, 202 4, is increased by t hree 42
percent (3%) of the allowance payable on June 1, 2024, in accordance with subsection (o) of this 43
section. Effective July 1, 202 5, the retirement allowance payable to, or on account of, 44
beneficiaries whose retirement commenced after July 1, 202 4, but before June 30, 20 25, is 45
increased by a prorated amount of t hree percent (3%), as determined by the Board of Trustees 46
based upon the number of months that a retirement allowance was paid between July 1, 202 4, 47
and June 30, 2025." 48
SECTION 4.1.(b) G.S. 135-65 is amended by adding a new subsection to read: 49
"(ll) Effective July 1, 202 5, the retirement allowance payable to, or on account of, 50
beneficiaries whose retirement commenced on or before July 1, 202 4, is increased by t hree 51
General Assembly Of North Carolina Session 2025
Senate Bill 326-First Edition Page 19
percent (3%) of the allowance payable on June 1, 202 4. Effective July 1, 202 5, the retirement 1
allowance payable to, or on account of, beneficiaries whose retirement commenced after July 1, 2
2024, but before June 30, 20 25, is increased by a prorated amount of t hree percent (3%), as 3
determined by the Board of Trustees based upon the number of months that a retirement 4
allowance was paid between July 1, 2024, and June 30, 2025." 5
SECTION 4.1.(c) G.S. 120-4.22A is amended by adding a new subsection to read: 6
"(ff) In accordance with subsection (a) of this section, effective July 1, 2025, the retirement 7
allowance payable to, or on account of, beneficiaries whose retirement commenced on or before 8
January 1, 2025, is increased by t hree percent (3%) of the allowance payable on June 1, 202 5. 9
Effective July 1, 2025, the retirement allowance payable to, or on account of, beneficiaries whose 10
retirement commenced after January 1, 2025, but before June 30, 2025, is increased by a prorated 11
amount of three percent (3%), as determined by the Board of Trustees based upon the number of 12
months that a retirement allowance was paid between January 1, 2025, and June 30, 2025." 13
SECTION 4.1.(d) G.S. 128-27 is amended by adding a new subsection to read: 14
"(hhh) Effective July 1, 202 5, the retirement allowance payable to, or on account of, 15
beneficiaries whose retirement commenced on or before July 1, 202 4, is increased by three 16
percent (3%) of the allowance payable on June 1, 2025, in accordance with subsection (k) of this 17
section. Effective July 1, 20 25, the retirement allowance payable to, or on account of , 18
beneficiaries whose retirement commenced after July 1, 20 24, but before June 30, 20 25, is 19
increased by a prorated amount of three percent (3%), as determined by the Board of Trustees 20
based upon the number of months that a retirement allowance was paid between July 1, 20 24, 21
and June 30, 2025." 22
SECTION 4.1.(e) This section becomes effective July 1, 2025. 23
24
APPROPRIATION 25
SECTION 5.1.(a) There is appropriated from the General Fund to the Reserve for 26
Retiree Cost-of-Living Adjustments the sum of two hundred fifty million dollars ($250,000,000) 27
in recurring funds for the 2025-2026 fiscal year to fund the cost -of-living adjustment provided 28
by this act. 29
SECTION 5.1.(b) This section becomes effective July 1, 2025. 30
31
EFFECTIVE DATE 32
SECTION 6.1. Except as otherwise provided, this act is effective when it becomes 33
law. 34