Working Families Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 708

Short Title: Working Families Act. (Public)
Sponsors: Senators Applewhite, Grafstein, and Bradley (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S708-v-1*
A BILL TO BE ENTITLED 1
AN ACT REDUCING PARE NT COPAYMENTS FOR SU BSIDIZED CHILD CARE, 2
REENACTING THE CHILD TAX CREDIT, INCREAS ING THE STATE MINIMU M 3
WAGE TO FIFTEEN DOLLARS PER HOUR ON LABOR DAY 2025 AND GRANTING 4
LOCAL GOVERNMENTS FL EXIBILITY TO SET A H IGHER LOCAL MINIMUM 5
WAGE, INCREASING THE INCOME ELIGIBILITY LIMIT FOR THE PROPERTY TAX 6
HOMESTEAD CIRCUIT BR EAKER, CREATING A HO MEBUYERS' ASSISTANCE 7
PROGRAM WITH THE NOR TH CAROLINA HOUSING FINANCE AGENCY FOR 8
FIRST-TIME HOMEBUYERS WHO WORK AS PUBLIC SERVANTS, AND ENACTING 9
THE NORTH CAROLINA P AID FAMILY LEAVE INS URANCE ACT TO HELP 10
WORKING FAMILIES AND CREATING THE EMPLOYER GRANT FUND TO OFFSET 11
COSTS INCURRED BY EM PLOYERS AND APPROPRI ATING FUNDS FOR THAT 12
PURPOSE. 13
The General Assembly of North Carolina enacts: 14
15
CHILD CARE SUBSIDIES 16
SECTION 1.1.(a) Section 9D.3(b) of S.L. 2023-134 reads as rewritten: 17
"SECTION 9D.3.(b) Fees for families who are required to share in the cost of care are 18
established based on ten percent (10%) seven percent (7%) of gross family income. When care 19
is received at the blended rate, the copayment shall be eighty-three percent (83%) of the full-time 20
copayment. Copayments for part-time care shall be seventy -five percent (75%) of the full -time 21
copayment." 22
SECTION 1.1.(b) This act becomes effective July 1, 2025. 23
24
REENACT CHILD TAX CREDIT 25
SECTION 2.1.(a) G.S. 105-153.10 is reenacted as it existed immediately before its 26
expiration and reads as rewritten: 27
"§ 105-153.10. Credit for children. 28
(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 29
Code for the taxable year is allowed a credit against the tax imposed by this Part for each 30
dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 31
credit against the tax imposed by this Part for each qualifying child of the taxpayer. A "qualifying 32
child" is defined by section 152(c) of the Code. The amount of credit allowed under this section 33
for the taxable year is equal to the amount l isted in the table below based on the taxpayer's 34
adjusted gross income, as calculated under the Code: 35
Filing Status AGI Credit Amount 36
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Page 2 Senate Bill 708-First Edition
Married, filing jointly Up to $40,000 $125.00$250.00 1
Over $40,000 2
Up to $100,000 $100.00$125.00 3
Over $100,000 0 4
5
Head of Household Up to $32,000 $125.00$250.00 6
Over $32,000 7
Up to $80,000 $100.00$125.00 8
Over $80,000 0 9
10
Single Up to $20,000 $125.00$250.00 11
Over $20,000 12
Up to $50,000 $100.00$125.00 13
Over $50,000 0 14
15
Married, filing separately Up to $20,000 $125.00$250.00 16
Over $20,000 17
Up to $50,000 $100.00$125.00 18
Over $50,000 0. 19
20
(b) Limitations. – A nonresident or part -year resident who claims the credit allowed by 21
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 22
G.S. 105-134.5(b) or (c), as appropriate.The credit allowed under this section may not exceed the 23
amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, 24
except payments of tax made by or on behalf of the taxpayer.G.S. 105-153.4. Married individuals 25
qualifying for a credit under this section who file separate returns may not collectively claim 26
more than the maximum credit allowed under a joint return. 27
(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 28
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 29
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 30
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part . In 31
computing the amount of tax against which multiple credits are allowed, nonrefundable credits 32
are subtracted before refundable credits." 33
SECTION 2.1.(b) This section is effective for taxable years beginning on or after 34
January 1, 2025. 35
36
INCREASE STATEWIDE MINIMUM WAGE AND ALLOW HIGHER LOCAL 37
MINIMUM WAGE 38
SECTION 3.1.(a) Effective Labor Day, September 1, 2025, G.S. 95-25.3(a) reads 39
as rewritten: 40
"(a) Every employer shall pay to each employee who in any workweek performs any work, 41
wages of at least six dollars and fifteen cents ($6.15) fifteen dollars ($15.00) per hour or the 42
minimum wage set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 43
206(a)(1), as that wage may change from time to time, whichever is higher, except as otherwise 44
provided in this section. A local government may adopt an ordinance establishing a local 45
minimum wage within its territorial jurisdiction that is higher than the statewide minimum wage; 46
then, in that case, every employer in the jurisdiction shall instead pay the higher local minimum 47
wage." 48
SECTION 3.1.(b) This section is effective when it becomes law. 49
50
INCOME ELIGIBILITY/PROPERTY TAX HOMESTEAD CIRCUIT BREAKER 51
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Senate Bill 708-First Edition Page 3
SECTION 4.1.(a) G.S. 105-277.1B reads as rewritten: 1
"§ 105-277.1B. Property tax homestead circuit breaker. 2
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 3
is designated a special class of property under A rticle V, Section 2(2) of the North Carolina 4
Constitution and is taxable in accordance with this section. 5
… 6
(f) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 7
of tax that is imposed for the current tax year on his or her permanent residence and exceeds the 8
percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 9
residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 10
limit imposed by t his section, then both the taxes due under this section and the taxes deferred 11
under this section must be apportioned among the taxing units based upon the ratio each taxing 12
unit's tax rate bears to the total tax rate of all units. 13
Income Over Income Up To Percentage 14
-0- Income Eligibility Limit 4.0% 15
Income Eligibility Limit 150% 180% of Income Eligibility Limit 5.0% 16
…." 17
SECTION 4.1.(b) This section is effective for taxes imposed for taxable years 18
beginning on or after July 1, 2025. 19
20
HOMEBUYERS' ASSISTANCE PROGRAM 21
SECTION 5.1.(a) As used in this section, the following definitions apply: 22
(1) Active duty member. – As defined in G.S. 58-58-335(1). 23
(2) Emergency medical services personnel. – As defined in G.S. 131E-155(7). 24
(3) Firefighter. – As defined in G.S. 58-84-5(3a). 25
(4) First-time homebuyer. – An individual who meets all of the following criteria: 26
a. Is purchasing the subject residential property. 27
b. Will reside in the subject residential property as a principal residence. 28
c. Has had no ownership interest, sole or joint, in a residential property 29
during the three-year period preceding the date of the purchase of the 30
subject residential property. 31
(5) Law enforcement officer. – An individual employed by the State or a local 32
government in this State as a sheriff, deputy sheriff, police officer, or member 33
of the State highway patrol. 34
(6) Public servant. – An active duty member or veteran, or a law enforcement 35
officer, teacher, firefighter, or emergency medical services personnel 36
employed in this State. 37
(7) Teacher. – An individual whose major responsibility is to either teach or 38
directly supervise teaching, as classified by the State Board of Education, in a 39
public school unit, as that term is defined in G.S. 115C-5(7a). 40
(8) Veteran. – As defined in G.S. 122C-465(3). 41
SECTION 5.1.(b) The Housing Finance Agency (Agency) shall establish a program 42
operating under the Homeownership Assistance Fund, authorized under G.S. 122A-5.7, that 43
provides assistance to first-time homebuyers that are employed full time as public servants in this 44
State. The Agency shall provide, in the form of reimbursement or direct payment, monies to be 45
used for down payment assistance and to offset mortgage insurance premiums charged to 46
program participants. First -time homebuyers shal l be limited to the lesser of the sum of 47
twenty-five thousand dollars ($25,000) or ten percent (10%) of the purchase price for down 48
payment assistance, mortgage insurance premium assistance, and closing costs. The Agency may 49
provide for mortgage insurance payment assistance at least monthly, but for no longer than 60 50
months for any single first-time homebuyer. 51
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SECTION 5.1.(c) The Agency is hereby empowered to adopt, modify, or repeal 1
rules and regulations governing the provision of down payment assistance and mortgage 2
insurance assistance provided pursuant to this section. 3
SECTION 5.1.(d) There is appropriated from the Gener al Fund to the 4
Homeownership Assistance Fund, authorized under G.S. 122A-5.7, the sum of one hundred fifty 5
million dollars ($150,000,000) in recurring funds for the 2025-2026 fiscal year to be used for the 6
purposes provided in this act. 7
SECTION 5.1.(e) This section becomes effective July 1, 2025. 8
9
PAID FAMILY LEAVE INSURANCE 10
SECTION 6.1.(a) Effective January 1, 2026, the General Statutes are amended by 11
adding a new Chapter to read: 12
"Chapter 96A. 13
"Paid Family Leave Insurance Act. 14
"§ 96A-1. Short title; definitions. 15
(a) This Chapter shall be known and may be cited as the "North Carolina Paid Family 16
Leave Insurance Act." 17
(b) The following definitions apply in this Chapter: 18
(1) Application year. – The 12 -month period beginning on the first day of the 19
calendar week in which an individual files an application for family and 20
medical leave insurance benefits. 21
(2) Assistant Secretary. – The Assistant Secretary of Commerce in charge of the 22
Division of Employment Security. 23
(3) Covered individual. – Any person who does all of the following: 24
a. Meets the monetary eligibility criteria set forth in G.S. 96-14.1(b) or 25
is self -employed, elects coverage , and meets the requirements of 26
G.S. 96A-13. 27
b. Meets the administrative requirements outlined in this Chapter and in 28
the rules adopted under this Chapter. 29
c. Submits an application. 30
(4) Covered service member. – Either: 31
a. A member of the Armed Forces , including a member of the National 32
Guard or Reserves, who is (i) undergoing medical treatment, 33
recuperation, or therapy , (ii) otherwise in outpatient status , or (iii) 34
otherwise on the temporary disability retired list for a serious injury or 35
illness that was incurred by the member in the line of duty on active 36
duty in the Armed Forces or a serious injury or illness that exi sted 37
before the beginning of the member's active duty and was aggravated 38
by service in the line of duty on active duty in the Armed Forces; or 39
b. A former member of the Armed Forces, including a former member of 40
the National Guard or Reserves, who is undergoing medical treatment, 41
recuperation, or therapy for a serious injury or illness that was incurred 42
by the member in the line of duty on active duty in the Armed Forces 43
or a serious injury or illness that existed before the beginning of the 44
member's active duty and was aggravated by service in the line of duty 45
on active duty in the Armed Forces and manifested before or after the 46
member was discharged or released from service. 47
(5) Division. – The Division of Employment Security of the Department of 48
Commerce. 49
(6) Employee. – Any individual employed by an employer. 50
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(7) Employer. – Any person acting directly or indirectly in the interest of an 1
employer in relation to an employee. As used in this subdivision, "person" 2
means an individual, partnership, association , corporation, business trust, 3
legal representative, or any organized group of persons. For the purposes of 4
this Chapter, it also means the State of North Carolina, any city, town, county, 5
municipality, or any State or local agency or instrumentality of go vernment. 6
The term does not include the government of the United States and any agency 7
of the United States (including the United States Postal Service and Postal 8
Rate Commission). 9
(8) Family and medical leave insurance benefits. – The benefits provided un der 10
the terms of this Chapter. 11
(9) Family member. – Any of the following: 12
a. Regardless of age, a biological, adopted , or foster child, stepchild, or 13
legal ward, a child of a domestic partner, a child to whom the employee 14
stands in loco parentis, or a person to whom the employee stood in 15
loco parentis when the person was a minor. 16
b. A biological, adoptive, or foster parent, stepparent , or legal guardian 17
of an employee or a n employee's spouse or domestic partner or a 18
person who stood in loco parentis when the employee or the 19
employee's spouse or domestic partner was a minor. 20
c. A person to whom the employee is legally married under the laws of 21
any state or a domestic partner of an employee as registered under the 22
laws of any state or political subdivision. 23
d. A grandparent, grandchild , or sibling (whether a biological, foster, 24
adoptive, or step relationship) of the employee or the employee 's 25
spouse or domestic partner. 26
e. Any other individual related by blood or whose close association with 27
the employee is the equivalent of a family relationship. 28
(10) Health care provider. – Any person licensed under federal or North Carolina 29
law to provide medical or e mergency services, including, but not limited to , 30
doctors, nurses and emergency room personnel, or certified midwives. 31
(11) Next of kin. – As defined in section 101(17) of the Family and Medical Leave 32
Act, 29 U.S.C. § 2611(17). 33
(12) Qualifying exigency leave. – Leave based on a need arising out of a covered 34
individual's family member 's active duty service or notice of an impending 35
call or order to active duty in the Armed Forces, including, but not limited to, 36
providing for the care o r other needs of the military member 's child or other 37
family member, making financial or legal arrangements for the military 38
member, attending counseling, attending military events or ceremonies, 39
spending time with the military member during a rest and rec uperation leave 40
or following return from deployment , or making arrangements following the 41
death of the military member. 42
(13) Retaliatory personnel action. – Denial of any right guaranteed under this 43
Chapter, including, but not limited to , any threat, disch arge, suspension, 44
demotion, reduction of hours, any other adverse action against an employee 45
for the exercise of any right guaranteed herein, or reporting or threatening to 46
report an employee 's suspected citizenship or immigration status or the 47
suspected c itizenship or immigration status of a family member of the 48
employee to a federal, State, or local agency. Retaliatory personnel actions 49
shall also include interference with or punishment for in any manner 50
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participating in or assisting an investigation, proceeding, or hearing under this 1
Chapter. 2
(14) Serious health condition. – An illness, injury, impairment, pregnancy, 3
recovery from childbirth, or physical or mental condition that involves 4
inpatient care in a hospital, hospice , or residential medical care facility, or 5
continuing treatment by a health care provider. 6
(15) State average weekly wage. – The average weekly insured wage as defined in 7
G.S. 96-1(b)(2). 8
"§ 96A-2. Eligibility for benefits. 9
Beginning January 1, 202 6, family and medical leave insurance benefits are payable to an 10
individual who: 11
(1) Meets the definition of "covered individual" as defined by G.S. 96A-1(b)(3); 12
and 13
(2) Meets one of the following requirements: 14
a. Because of birth, adoption, or placement through foster care, is caring 15
for a new child during the first year after the birth, adoption , or 16
placement of that child; 17
b. Is caring for a family member with a serious health condition; 18
c. Has a serious health condition; 19
d. Is caring for a covered service member who is the covered individual's 20
next of kin or other family member; or 21
e. Because of any "qualifying exigency leave" arising out of the fact that 22
the family member of the covered individual is on active duty (or has 23
been notified o f an impending call or order to active duty) in the 24
Armed Forces. 25
"§ 96A-3. Duration of benefits. 26
(a) The maximum number of weeks during which family and medical leave insurance 27
benefits are payable under G.S. 96A-2(2)c. in an application year is 18 weeks. 28
(b) The maximum number of weeks during which family and medical leave insurance 29
benefits are payable under G.S. 96A-2(2)a., (2)b., or (2)e. in an application year is 12 weeks. 30
(c) The maximum number of weeks during which family and medical leave ins urance 31
benefits are payable under G.S. 96A-2(2)d. in an application year is 26 weeks. 32
(d) The first payment of benefits must be made to an individual within two weeks after 33
the claim is filed, and subsequent payments must be made every two weeks thereafter. 34
"§ 96A-4. Amount of benefits. 35
(a) The amount of family and medical leave insurance benefits shall be determined as 36
follows: 37
(1) The weekly benefit shall be determined as follows: (i) the portion of the 38
covered individual's average weekly wage that is equal to or less than one 39
hundred percent (100%) of the State average weekly wage shall be replaced 40
at a rate of ninety percent ( 90%) and (ii) the portion of an employee 's or 41
self-employed individual 's average weekly wage that is more than one 42
hundred percent (100%) of the State average weekly wage shall be replaced 43
at a rate of fifty percent (50%). 44
(2) The maximum benefit shall be one hundred percent ( 100%) of the statewide 45
average weekly wage. 46
(3) The minimum weekly benefit s hall not be less than one hundred dollars 47
($100.00) per week except that if the covered individual 's average weekly 48
wage is less than one hundred dollars ($100.00) per week, the weekly benefit 49
shall be the employee's full wage. 50
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(4) For purposes of this section, a covered individual's average weekly wage shall 1
be the average weekly wage during the 12 months preceding submission of 2
the application (or the average weekly wage during the time the covered 3
individual worked, if it was less than 12 months). 4
(b) Family and medical leave insurance benefits are not payable for less than eight hours 5
of family and medical leave taken in one workweek. 6
"§ 96A-5. Contributions. 7
(a) Payroll contributions shall be authorized in order to finance the payment of benefits 8
under the family and medical leave insurance program. 9
(b) Beginning on January 1, 2026, for each employee, an employer shall remit to the Paid 10
Family and Med ical Leave Fund (Fund), established under G.S. 96A-16, contributions in the 11
form and manner determined by the Division. Annually, not later than October 1, the Assistant 12
Secretary shall fix the contribution rate for the coming calendar year in the manner described in 13
this subsection. For calendar years 202 6 and 2027, the Assistant Secretary shall do so based on 14
sound actuarial principles. For calendar year 202 8 and thereafter, the Assistant Secretary shall 15
first certify and publish the following information: 16
(1) The total amount of family and medical leave insurance benefits paid by the 17
Division during the previous fiscal year; 18
(2) The total amount remaining in the Fund at the close of the fiscal year; 19
(3) The total amount equal to one hundred forty percent ( 140%) of the previous 20
fiscal year's expenditure for family and medical leave insurance benefits paid 21
and for the administration of the family and medical leave insurance program; 22
(4) The amount by which the total amount remaining in the Fund at the close of 23
the previous fiscal year is less than or greater than one hundred forty percent 24
(140%) of the previous fiscal year's expenditure for family and medical leave 25
insurance benefits paid and for the administration of the family and medical 26
leave insurance program; and 27
(5) The amount by which the contribution rate shall be adjusted to ensure that the 28
Fund shall maintain or achieve an annualized amount of not less than one 29
hundred forty percent ( 140%) of the previous fiscal year 's expenditure for 30
family and medical leave insurance benefits paid and for the administration of 31
the family and medical leave insurance program. The contribution rate 32
adjustment, if any, made as the result of the Assistant Secretary's certification 33
and report under this subsection shall supersede the rate previously set forth 34
and shall become effective on January 1 of the following calendar year. 35
(c) A self -employed individual who is electing coverage under G.S. 96A-13 shall be 36
responsible for the employee's share of contributions set forth in subsection (b) of this section on 37
that individual's income from self-employment. 38
(d) An employer shall not deduct more than fifty percent ( 50%) of the contribution 39
required for an employee by subsection (b) of this section from that employee's wages and shall 40
remit the full contribution required under said subsection to the Fund. 41
"§ 96A-6. Reduced leave schedule. 42
(a) A covered individual shall be entitled, at the option of the covered individual, to take 43
paid family and medical leave on an intermittent or reduced leave schedule in which all of the 44
leave authorized under this Chapter is not taken sequentially. Family and medical leave insurance 45
benefits for intermittent or reduced leave schedules shall be prorated. 46
(b) The covered individual shall make a reasonable effort to schedule paid family and 47
medical leave under this section so as not to unduly disrupt the operations of the employer. The 48
covered individual shall provide the employer with prior notice of the schedule on which the 49
covered individual will tak e the leave, to the extent practicable. Paid family and medical leave 50
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taken under this section shall not result in a reduction of the total amount of leave to which an 1
employee is entitled beyond the amount of leave actually taken. 2
(c) Nothing in this section shall be construed to entitle a covered individual to more leave 3
than required under G.S. 96A-3. 4
"§ 96A-7. Leave and employment protection. 5
(a) Any covered individual who exercises his or her right to family and medical leave 6
insurance benefits shall, upon the expiration of that leave, be entitled to be restored by the 7
employer to the position held by the covered individual when the leave commenced, or to a 8
position with equivalent seniority, status, employmen t benefits, pay , and other terms and 9
conditions of employment , including fringe benefits and service credits that the covered 10
individual had been entitled to at the commencement of leave. 11
(b) During any leave taken pursuant to G.S. 96A-2, the employer shal l maintain any 12
health care benefits the covered individual had prior to taking such leave for the duration of the 13
leave as if the covered individual had continued in employment continuously from the date he or 14
she commenced the leave until the date the fam ily and medical leave insurance benefits 15
terminate; provided, however, that the covered individual shall continue to pay the covered 16
individual's share of the cost of health benefits as required prior to the commencement of the 17
leave. 18
(c) Any employer who violates this section or G.S. 96A-8 shall be liable to any eligible 19
employee affected as follows: 20
(1) For damages equal to the amount of (i) any wages, salary, employment 21
benefits, or other compensation denied or lost to such employee by reason of 22
the violation, or (ii) in a case in which wages, salary, employment benefits, or 23
other compensation have not been denied or lost to the employee, any actual 24
monetary losses sustained by the employee as a direct result of the violation, 25
such as the cost of providing care, up to a sum equal to 12 weeks of wages or 26
salary for the employee, (iii) the interest on the amount described in clause (i) 27
of this subdivision calculated at the prevailing rate , and (i v) an additional 28
amount as liquidated damages equal to the sum of the amount described in 29
clause (i) of this s ubdivision and the interest described in clause (ii) of this 30
subdivision, except that if an employer who has violated this section or 31
G.S. 96A-8 pr oves to the satisfaction of the court that the act or omission 32
which violated the section was in good faith and that the employer had 33
reasonable grounds for believing that the act or omission was not a violation, 34
the court may, in the discretion of the court, reduce the amount of the liability 35
to the amount and interest determined under clauses (i) and (ii) of this 36
subdivision, respectively. 37
(2) For such equitable relief as may be appropriate, including employment, 38
reinstatement, and promotion. 39
(d) An action to recover the damages or equitable relief prescribed in subsection (c) of 40
this section may be maintained against any employer (including a public agency) in any federal 41
or State court of competent jurisdiction by any one or more employees for and on behalf of the 42
employees or the employees and other employees similarly situated. 43
(e) The court in such an action shall, in addition to any judgment awarded to the plaintiff, 44
allow a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to 45
be paid by the defendant. 46
(f) Except as provided by subsection (g) of this section, an action may be brought under 47
this section not later than two years after the date of the last event constituting the alleged 48
violation for which the action is brought. 49
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(g) In the case of an action brought for a willful violation of this section or G.S. 96A-8, 1
the action may be brought within three years of the date of the last event constituting the alleged 2
violation for which such action is brought. 3
"§ 96A-8. Retaliatory personnel actions prohibited. 4
(a) It shall be unlawful for an employer or any other person to interfere with, restrain, 5
deny the exercise of, or the attempt to exercise any right protected under this Chapter. 6
(b) An employer, temporary help company, employment agency, employee organization, 7
or other person shall not take retaliatory personnel action or otherwise discriminate against a 8
person because he or she exercised rights protected under this Chapter. Such rights include , but 9
are not limited to, the right to request, file for, apply for, or use benefits provided for under this 10
Chapter; to take leave from work under this Chapter; communicate to the employer or any other 11
person or entity an intent to file a claim, a complaint with the Division or courts, or an appeal; or 12
has testified or is about to testify or has assisted in any investigation, hearing, or proceeding under 13
this Chapter, at any time, including during the period in which the person receives family and 14
medical leave insurance benefits under this Chapter; inform any person about any employer's 15
alleged violation of this Chapter; and the right to inform any person of his or her rights under this 16
Chapter. 17
(c) It shall be unlawful for an employer's absence control policy to count paid family and 18
medical leave taken under this Chapter as an absence that may lead to or result in discipline, 19
discharge, demotion, suspension, or any other adverse action. 20
(d) Protections of this section shall apply to any person who mistakenly, but in good faith, 21
alleges violations of this Chapter. 22
(e) This section shall be enforced as provided in subsections (c) through (g) of 23
G.S. 96A-7. 24
"§ 96A-9. Coordination of benefits. 25
(a) Leave taken with wage replacement under this Chapter that also qualifies as leave 26
under the Family and Medical Leave Act shall run concurrently with leave taken under the 27
Family and Medical Leave Act. 28
(b) An employer may require that payment made pursuant to this Chapter be made 29
concurrently or otherwise coordinated with payment made or leave allowed under the terms of 30
disability or family care leave under a collective bargaining agreement or employer policy. The 31
employer must give employees written notice of this requirement. 32
(c) This Chapter does not diminish an employer 's obligation to comply with any of the 33
following that provide more generous leave: 34
(1) A collective bargaining agreement; 35
(2) An employer policy; or 36
(3) Any law. 37
(d) An individual's right to leave under this Chapter may not be diminished by a collective 38
bargaining agreement entered into or renewed, or an employer policy adopted or retained, after 39
the effective date of this Chapter. Any agreement by an individual to waive his or her rights under 40
this Chapter is void as against public policy. 41
"§ 96A-10. Notice. 42
(a) Each employer shall provide written notice to each employee upon hiring and 43
annually thereafter. An employer shall also provide written notice to an employee when the 44
employee requests leave unde r this Chapter or when the employer acquires knowledge that an 45
employee's leave may be for a qualifying reason under G.S. 96A-2. Such notice shall include (i) 46
the employee's right to family and medical leave insurance benefits under this Chapter and the 47
terms under which it may be used, (ii) the amount of family and medical leave insurance benefits, 48
(iii) the procedure for filing a claim for benefits , (iv) the right to job protection and benefits 49
continuation under G.S. 96A-7, (v) that discrimination and retaliatory personnel actions against 50
a person for requesting, applying for , or using family and medical leave insurance benefits is 51
General Assembly Of North Carolina Session 2025
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prohibited under G.S. 96A-8, and (vi) that the employee has a right to file a complaint for 1
violations of this Chapter. An employer shall also display and maintain a poster in a conspicuous 2
place accessible to employees at the employer 's place of business that contains the informatio n 3
required by this section in English, Spanish, and any language that is the first language spoken 4
by at least five percent ( 5%) of the employer 's workforce, provided that such notice has been 5
provided by the Division. The Assistant Secretary may adopt reg ulations to establish additional 6
requirements concerning the means by which employers shall provide such notice. 7
(b) Employees shall provide notice to their employers as soon as practicable of their 8
intention to take leave under this Chapter. 9
"§ 96A-11. Enforcement. 10
(a) The Assistant Secretary shall establish a system for appeals in the case of a denial of 11
family and medical leave insurance benefits. In establishing such system, the Assistant Secretary 12
may utilize any and all procedures and appeals mechanisms established under G.S. 96-15. 13
(b) Judicial review of any decision with respect to family and medical leave insurance 14
benefits shall be permitted in a court of competent jurisdiction after a party aggrieved thereby 15
has exhausted all administrative remedies established by the Assistant Secretary. 16
(c) The Assistant Secretary shall implement procedures to ensure confidentiality of all 17
information related to any claims filed or appeals taken to the maximum extent permitted by 18
applicable laws. 19
"§ 96A-12. Erroneous payments and disqualification for benefits. 20
(a) A covered individual is disqualified from family and medical leave insurance benefits 21
for one year if the individual is determined by the Assistant Secretary to have willfully made a 22
false statement or misrepresentation regarding a material fact or willfully failed to report a 23
material fact to obtain benefits under this Chapter. 24
(b) If family and medical leave insurance benefits are paid erroneously or as a result of 25
willful misrepresentation, or if a claim for family and medical leave insurance benefits is rejected 26
after benefits are paid, the Division may seek repayment of benefits from the recipient. The 27
Assistant Secretary shall exercise his or her discretion to waive, in whole or in part, the amount 28
of any such payments where the recovery would be against equity and good conscience. 29
"§ 96A-13. Elective coverage. 30
(a) A self-employed person, including a sole proprietor, partner , or joint venturer, may 31
elect coverage under this Chapter for an initial period of not less than three years. The 32
self-employed person must file a notice of election in writing with the Assistant Secretary, as 33
required by the Division. The election becomes effective on the date of filing the notice. As a 34
condition of election, the self-employed person must agree to supply any information concerning 35
income that the Division deems necessary. 36
(b) A self -employed person who has elected coverage may withdraw fro m coverage 37
within 30 days after the end of the three -year period of coverage, or at such other times as the 38
Assistant Secretary may prescribe by rule, by filing written notice with the Assistant Secretary, 39
such withdrawal to take effect not sooner than 30 days after filing the notice. 40
"§ 96A-14. Family and medical leave insurance program. 41
(a) The Division shall establish and administer a family and medical leave insurance 42
program and begin collecting contributions as specified in this Chapter. By January 1, 2025, the 43
Division shall start receiving claims from and paying family and medical leave insurance benefits 44
to covered individuals. 45
(b) The Division shall establish reasonable procedures and forms for filing claims for 46
benefits under this Chapter and sh all specify what supporting documentation is necessary to 47
support a claim for benefits, including any documentation required from a health care provider 48
for proof of a serious health condition. 49
(c) The Division shall notify the employer within five busines s days of a claim being 50
filed pursuant to this Chapter. 51
General Assembly Of North Carolina Session 2025
Senate Bill 708-First Edition Page 11
(d) The Division shall use information sharing and integration technology to facilitate the 1
disclosure of relevant information or records, so long as an individual consents to the disclosure 2
as required under State law. 3
(e) Information contained in the files and records pertaining to an individual under this 4
Chapter are confidential and not open to public inspection other than to public employees in the 5
performance of their official duties. However, the individual or an authorized representative of 6
an individual may review the records or receive specific information from the records upon the 7
presentation of the individual's signed authorization. 8
(f) The Department of Commerce shall adopt rules as necessary to implement this 9
Chapter. 10
"§ 96A-15. Federal income tax. 11
If the Internal Revenue Service determines that family and medical leave insurance benefits 12
under this Chapter are subject to federal income tax, the Division must advise an individual filing 13
a new claim for family and medical leave insurance benefits, at the time of filing such claim, that 14
the Internal Revenue Service has determined that benefits are subject to federal income tax and 15
that requirements exist pertaining to estimated tax payments. 16
"§ 96A -16. Family and medical leave insurance account fund; establishment and 17
investment. 18
(a) The Paid Family and M edical Leave Fund (Fund) is created in the custody of the 19
Division. Expenditures from the Fund may be used only for the purposes of the family and 20
medical leave insurance benefits program. Only the Assistant Secretary of the Division or the 21
Assistant Secretary's designee may authorize expenditures from the Fund. 22
(b) Whenever, in the judgment of the Division , there shall be in the Fund an amount of 23
funds in excess of that amount deemed by the Division to be sufficient to meet the current 24
expenditures properly payable therefrom, the Division shall have full power to invest, reinvest, 25
manage, contract, sell, or exchange investments acquired with such excess funds in the manner 26
prescribed by North Carolina law. 27
"§ 96A-17. Employer Grant Fund. 28
There is created in the Department of Commerce the Employer Grant Fund to offset the costs 29
of the program for employers that demonstrate the need for financial assistance in meeting the 30
requirements of this Chapter. The Employer Grant Fund shall consist of appropriations from the 31
General Fund . Donations from p ublic agencies and private sources may be accepted if the 32
donations are unconditional and unrestricted. The Department of Commerce shall adopt rules for 33
the administration of the grant funds. 34
"§ 96A-18. Reports. 35
Beginning January 1, 2028, the Division shall report to the General Assembly by April 1 of 36
each year on projected and actual program participation by purpose listed in G.S. 96A-2, gender 37
of beneficiary, premium rates, fund balances, outreach eff orts, and, for leaves taken under 38
G.S. 96A-2, family members for whom leave was taken to provide care. 39
"§ 96A-19. Public education. 40
The Division shall conduct a public education campaign to inform workers and employers 41
regarding the availability of family and medical leave insurance benefits. Outreach information 42
shall be available in English, Spanish, French, German, Vietnamese, Chinese, Arabic, Korean, 43
Tagalog, Hindi, Gujarati, Russian, Hmong, and other languages spoken by more than five percent 44
(5%) of the State's population. 45
"§ 96A-20. Sharing technology. 46
The Division is encouraged to use State data collection and technology to the extent possible 47
and to integrate the program with existing State policies. 48
"§ 96A-21. Severability. 49
General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 708-First Edition
If any provision of this Chapter or its application to any person or circumstance is held 1
invalid, the remainder of the Chapter or the application of the provision to other persons or 2
circumstances is not affected." 3
SECTION 6.1.(b) All rules necessary for implementation of t his section shall be 4
adopted by October 1, 2023. 5
SECTION 6.1.(c) There is appropriated from the General Fund to the Department 6
of Commerce, Employer Grant Fund, the sum of nineteen million dollars ($19,000,000) for the 7
2025-2026 fiscal year and the sum of thirty million dollars ($30,000,000) in the 2026-2027 fiscal 8
year to offset employer costs of the Paid Family Medical Leave Act as enacted by this section. 9
SECTION 6.1.(d) This section becomes effective July 1, 2025. 10
11
EFFECTIVE DATE 12
SECTION 7.1. Except as otherwise provided, this act is effective when it becomes 13
law. 14