North Carolina: Minimum Wage, Paid Leave Bills Introduced

North Carolina employment law has been less active in recent years than many other states.

But lawmakers have been active lately, proposing minimum wage and paid leave legislation.

In this month’s roundup of state-specific employment law, we focus on North Carolina’s potential new laws.

Minimum Wage

Under proposed legislation, North Carolina would join the states that have plans to reach a $15 minimum wage.

Today, minimum wage in North Carolina is at the federal level of $7.25 and $2.13 for employees who receive tips.

However, the bill calls for more severe jumps in minimum wage than typically seen elsewhere. Often, jurisdictions opt for gradual increases. If the new legislation passes, minimum wage in North Carolina would be:

• $10.35 on Jan. 1, 2022
• $15 in on Jan. 1, 2023

After that point, increases would be based on the Consumer Price Index.

Meanwhile, for tipped employees, the minimum wage would be $6.50 an hour starting in 2022, with the rate increasing to $9.50 in 2023. Minimum wage for tipped employees would go up again in 2024 ($12.50) and again in 2025 ($15). Tip pooling would be allowed so long as no employee’s tips are reduced by more than 15 percent.

The bill, if enacted, would also repeal the subminimum wage for certain workers and repeal minimum wage exemptions for agricultural and domestic employees.

Paid Leave

Two bills related to paid leave were also recently introduced in North Carolina. The state does not currently have any paid leave laws beyond federal requirements.

Paid Family Leave Insurance Act

Under the proposed North Carolina Paid Family Leave Insurance Act, employees would get up to 12 weeks of paid leave to address their own health concerns as well as caring for a new child, sick family member or to deal with a military issue.

As with many paid family and medical leave laws, benefits would be tied to the employee’s rate of pay and the state average weekly wage.

The legislation also:

• Includes anti-retaliation measures
• Includes notice requirements
• Includes reporting and recordkeeping requirements
• Broadly defines family member, including “the equivalent of a family relationship”

If passed, it would be effective Jan. 1, 2022, when employees and employers begin paying into the fund. Employees would be eligible for benefits Jan. 1, 2023.

Healthy Families and Healthy Workplaces Act

The second paid leave bill introduced in North Carolina is called the Healthy Families and Workplaces Act.

The legislation calls for employees to accrue one hour of sick time for every 30 hours worked. There are separate caps for small and large employers:

• Small employers: Limit of 32 hours of accrued paid sick time in a calendar year
• Large employers: Limit of 56 hours of accrued paid sick time in a calendar year

Covered reasons for use include:

• Caring for an employee’s or family member’s illness or mental health condition
• Preventative medical care, including appointments
• Time needed to deal with stalking, and domestic abuse and sexual violence

The bill also includes posting, notification and recordkeeping requirements.

If passed, it would go into effect July 1, 2021.

Other North Carolina Employment Law Considerations

North Carolina employment law also includes:

• E-Verify for companies with 25 or more workers
• Anti-discrimination law for employers with 15 or more workers
• Unpaid leave of absences in certain situations

Conclusion

At a glance, North Carolina has not been on the forefront of passing new employment laws. However, that could be changing with the new legislation introduced earlier this month.

How legislators respond to these proposals could be a harbinger of the future of employment law in North Carolina.

For other state-specific employment law roundups from Employment Law News, check out:

• Oregon
• Colorado
• Illinois

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.