A BILL TO BE ENTITLED
AN ACT requiring paid leave employment benefits for employees and establishing a trust fund to secure those benefits.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 95 of the General Statutes is amended by adding a new Article to read:
"Article 21A.
"Paid Leave Benefits and Trust Fund.
"§ 95‑246.  Definitions.
Definitions. – The following definitions apply in this Article:
(1)	Employment benefits. – All benefits provided or made available to employees by an employer, including group life insurance, health insurance, disability insurance, sick leave, annual or vacation leave, educational benefits, and pensions.
(2)	Family care benefits. – The disability benefits provided pursuant to this Article to a covered employee who is on leave from or who has left employment with the employer because the employee is caring for a family member for one of the following reasons: (i) the birth of a child of the employee, (ii) the placement of a child with the employee for adoption or foster care, or (iii) a serious health condition of a family member of the employee.
(3)	Family care leave. – The leave taken by a covered employee from employment to provide care for a family member for one of the following reasons: (i) the birth of a child of the employee, (ii) the placement of a child with the employee for adoption or foster care, or (iii) a serious health condition of a family member of the employee.
(4)	Family member. – The spouse, child, parent, parent of spouse, grandparent, or grandchild of an individual seeking leave or disability benefits under this Article.
(5)	Serious health condition. – An illness, injury, impairment, or physical or mental condition that involves either (i) inpatient care in a hospital, hospice, or residential medical facility or (ii) continuing treatment by a health care provider.
(6)	Temporary disability benefits. – Disability benefits provided to a covered employee who is on a leave from or who has left employment with the employer because of a serious health condition of the employee that makes the employee unable to perform the functions of the employee's position.
(7)	Temporary disability leave. – Leave taken by a covered employee from employment because of a serious health condition of the employee that makes the employee unable to perform the functions of the employee's position.
"§ 95‑246.1.  Paid leave required; temporary disability; family care.
(a)	Eligibility. – An employee is eligible for temporary disability leave or family care leave if the employee has at least 1,250 hours of service for the employer. The duration of temporary disability or family care leave shall be limited as provided by this section.
(b)	Birth of Child. – In the case of family care leave taken because of (i) the birth of a child of the employee or (ii) the placement of a child with the employee for adoption or foster care, the entitlement to leave shall expire at the end of the 12‑month period beginning on the date of the birth or placement.
(c)	Certification. – An employer may, at its option, require that a request for temporary disability or family care leave be supported by a certification of the need for leave.
(d)	Restoration. – An employee who has taken temporary disability or family care leave pursuant to this section shall be restored to the employee's previous position, or to a substantially similar position, with the same status, pay, employment benefits, length of service credit, and seniority as of the date of leave, provided that the right to such restoration shall be limited to 12 weeks during any 12‑month period. An employer shall not be required to restore an employee who has taken temporary disability or family care leave to the previous or to a substantially similar position if other employees of equal length of service credit and status in the same or substantially similar positions have been laid off due to economic conditions or other changes in operating conditions affecting employment during the period of leave; provided, however, that the employee who has taken leave shall retain any preferential consideration for another position to which the employee was entitled as of the date of leave.
(e)	Accrued Leave. – Taking of temporary disability or family care leave shall not affect an employee's right to receive accrued vacation time, sick leave, bonuses, advancement, seniority, length of service credit, employment benefits, plans or programs for which the employee was eligible at the date of the employee's leave, and any other rights incident to the employee's employment.
(f)	Coverages Continued. – During the duration of an employee's temporary disability or family care leave, the employer shall continue to provide for and contribute to the employee's employment‑related health insurance benefits, if any, under the same terms and conditions as those existing prior to leave, up to 12 weeks during any 12‑month period.
(g)	Other Laws. – Nothing in this section shall be construed so as to affect any bargaining agreement, company policy, or other federal or State law which provides for greater or additional rights to leave than those provided for by this section.
(h)	Notification. – If an employee intends to take family care leave because of the birth of a child of the employee, or the placement of a child with the employee for adoption or foster care, and where the need for leave is foreseeable, the employee shall notify the employer of the intended leave at least 30 days prior to the date that the leave is to begin, except that if the date of the birth or placement requires leave to begin in less than 30 days, the employee shall provide such notice as is practicable. If an employee intends to take temporary disability or family care leave because of a serious health condition of the employee or of a family member of the employee, and where the need for leave is foreseeable based on planned medical treatment, the employee shall notify the employer of the intended leave at least 30 days prior to the date that the leave is to begin, except that if the date of the treatment requires leave to begin in less than 30 days, the employee shall provide such notice as is practicable. The notice required under this subsection shall consist of the anticipated starting date of the leave, the length of the leave, and the expected date of return. If an employer fails to provide notice of the provisions of this section, the employee's notice requirement shall be waived.
(i)	Unlawful Activity. – It is unlawful for any employer to retaliate by discharging, firing, suspending, expelling, disciplining, or in any other manner discriminating against an employee:
(1)	For exercising any right to which such employee is entitled under this section or with the purpose of interfering with the exercise of any right to which such employee is entitled under this section or
(2)	Who has filed a complaint or instituted or caused to be instituted a proceeding under or related to this section, has testified or is about to testify in an inquiry or proceeding, or has given or is about to give information connected to any inquiry or proceeding relating to this section.
(j)	Seniority. – Any negative change in the seniority, status, employment benefits, pay, or other terms or conditions of employment of an employee who has been restored to a position pursuant to this section that occurs within six months of such restoration, or of an employee who has participated in proceedings or inquiries pursuant to this section within six months of the termination of proceedings, shall be presumed to be retaliation under this section.
(k)	Enforcement. – The Commissioner of Labor shall interpret and enforce of this Article and may adopt rules and regulations for that purpose.
"§ 95‑246.2.  Benefit computations; other requirements.
(a)	Computation of Benefits. – The weekly benefit amount under this Article shall be determined as follows:
(1)	For an eligible individual whose yearly earnings are not more than thirty percent (30%) of the area median income, the weekly benefit amount shall be equal to ninety‑five percent (95%) of the eligible individual's weekly wage;
(2)	For an eligible individual whose yearly earnings are more than thirty percent (30%) of but not more than fifty percent (50%) of the area median income, the weekly benefit amount shall be equal to ninety percent (90%) of the eligible individual's weekly wage;
(3)	For an eligible individual whose yearly earnings are more than fifty percent (50%) of but not more than eighty percent (80%) of the area median income, the weekly benefit amount shall be equal to eighty‑five percent (85%) of the eligible individual's weekly wage; and
(4)	For an eligible individual whose yearly earnings are more than eighty percent (80%) of the area median income, the weekly benefit amount shall be equal to sixty‑six percent (66%) of the eligible individual's weekly wage.
(b)	Cap on Benefits. – The weekly benefit determined under subsection (a)(1) of this section shall not exceed one thousand dollars ($1,000) per week. Commencing January 1, 2018, the Commissioner of Labor shall adjust annually the maximum weekly benefit amount to reflect changes in the United States Bureau of Labor Statistics Consumer Price Index for all urban consumers, all goods, or its successor index.
(c)	Prorated Benefits. – For an employee who takes leave on a part‑time basis, the weekly benefit amount shall be prorated.
(1)	Temporary disability benefits. – The duration of temporary disability benefits shall not exceed 26 weeks during the benefit year unless the employee takes leave on a part‑time basis, in which case the duration of temporary disability benefits shall not exceed 52 calendar weeks and the total benefit amount shall not exceed 26 times the weekly benefit amount.
(2)	Family care benefits. – The duration of family care benefits shall not exceed 12 weeks during the benefit year unless the employee takes leave on a part‑time basis, in which case the duration of family care benefits shall not exceed 24 calendar weeks and the total benefit amount shall not exceed 12 times the weekly benefit amount.
(d)	Waiting Period. – No temporary disability or family care benefits shall be paid during the first seven consecutive days of any claim for such benefits. An employee may but shall not be required to utilize accrued sick or vacation pay during the first seven consecutive days of his claim for temporary disability benefits.
(e)	Certification. – An employee who makes a claim for:
(1)	Temporary disability benefits shall provide a certification issued by the health care provider of the employee. The certification shall be sufficient if it states the date on which the serious health condition commenced, the probable duration of the condition, the appropriate medical facts within the knowledge of the health care provider, and a statement that the employee is unable to perform the functions of his position.
(2)	Family care benefits because of the serious health condition of a family member of the employee shall provide a certification issued by the health care provider of the family member. The certification shall be sufficient if it states the date on which the serious health condition commenced, the probable duration of the condition, the appropriate medical facts within the knowledge of the health care provider, a statement that the employee is needed to care for the family member, and an estimate of the amount of time that the employee is needed to care for the family member.
(3)	Family care benefits because of the birth of a child of the employee shall provide either a birth certificate or a certification issued by the health care provider of the child of the eligible employee. The certification shall be sufficient if it states the date of the child's birth.
(4)	Family care benefits because of the placement of a child with the employee for adoption or foster care shall provide a certification issued by the health care provider of the child, an adoption or foster care agency involved in the placement, or by other persons as determined by the division. The certification shall be sufficient if it states the date of placement.
(5)	Family care benefits because of the placement with the employee for adoption or foster care of a child 18 years of age or older and incapable of self‑care because of a mental or physical disability shall, in addition to the certification required by subdivision (4) of this subsection, also provide a certification issued by the health care provider of the child or by other persons as determined by the division. The certification shall be sufficient if it states the nature of the disability and fact that the child is incapable of self‑care.
(f)	Misrepresentation. – An individual shall not be eligible to receive disability benefits if the Commissioner of Labor finds that the individual, for the purpose of obtaining disability benefits, has willfully made a false statement or representation, with actual knowledge of the falsity thereof, or has willfully withheld a material fact concerning the facts required to be certified pursuant to this subsection.
(g)	Confidentiality. – Any medical or health information required under this section shall be treated as confidential and not disclosed except with permission from the employee who provided it unless disclosure is otherwise required by law.
(h)	Ineligibility. – No individual may receive benefits under this section for a week in which the individual receives an amount equal to or greater than the weekly benefit amount in the form of wages or a wage replacement under any of the following:
(1)	Any government program or law, including, but not limited to unemployment insurance, workers' compensation other than for permanent partial disability incurred prior to the temporary disability claim, or under other State or federal temporary or permanent disability benefits law.
(2)	A permanent disability policy or program of an employer.
(3)	A temporary disability policy or program of an employer.
(4)	A paid sick, vacation, family, or medical leave policy of an employer. For a week in which an individual receives wages or a wage replacement less than the weekly benefit amount, the individual shall receive disability benefits equal to the difference between the weekly benefit amount and the amount of wages or wage replacement received.
Any wage replacement received under the programs or policies listed in this subsection and resulting from the same birth, adoption, or serious health condition on which the individual's claim for disability benefits is based shall be deducted from the total amount of disability benefits for which the individual would otherwise be eligible.
(i)	No Exhaustion Requirement. – Nothing in this subsection shall be construed to allow an employer to compel an employee to exhaust rights to any paid sick, vacation, or personal time prior to receiving benefits under this Article.
(j)	Public Education. – There Commissioner of Labor shall establish a division of family and medical leave which shall conduct a public education campaign to inform workers and employers about the availability of temporary disability and family care leave and benefits, the requirements for receiving such leave and benefits, and how to apply for such leave and benefits.
"§ 95‑246.3.  Benefits administration; security.
(a)	An employer or an association of employers shall secure temporary disability and family care benefits for employees in any of the following ways:
(1)	By depositing and maintaining with the Treasurer of the State, the contributions which the employer is required to pay according to the terms of this Article and in the form and manner determined by the division.
(2)	By insuring and keeping insured the payment of temporary disability and family care benefits with any stock, mutual, reciprocal, or other insurer authorized to transact the business of disability insurance in the State, provided that the policy is acceptable to the division as satisfying the obligation to provide for the payment of disability benefits under this Article, that the benefits under the policy are at least as favorable as the disability benefits required by this Article and that the policy does not require contributions from any employee or class of employees.
(3)	By a private plan or agreement which the employer may, by her or his sole act, terminate at any time, provided that the plan or agreement is acceptable to the division as satisfying the obligation to provide for the payment of disability benefits under this Article, that the benefits under the plan or agreement are at least as favorable as the disability benefits required by this Article, and that the policy does not require contributions from any employee or class of employees.
(4)	By any plan or agreement in existence by agreement or collective bargaining contract between the employer or employers or an association of employers and an association of employees, provided that the plan or agreement is acceptable to the division as satisfying the obligation to provide for the payment of disability benefits under this Article, that the benefits under the plan or agreement are at least as favorable as the disability benefits required by this Article, and that the plan or agreement does not require contributions from any employee or of any class of employees.
(5)	Nothing in this Article shall be construed as to affect any bargaining agreement, company policy, or other State or federal law which provides for greater or additional benefits than those required under this Article.
(6)	Nothing in this Article shall be construed as prohibiting employees from contributing to the additional cost attributable to providing benefits that are greater than those required under this Article.
(b)	If payment of disability benefits is provided in whole or in part pursuant to subdivisions (2), (3), or (4) of subsection (a) of this section, the employer or insurer shall file with the division a notice of coverage and statement of benefits provided.
(c)	Employers providing for the payment of disability benefits under subdivisions (2), (3), or (4) of subsection (a) of this section shall not be required to make contributions pursuant to subdivision (1) of subsection (a) of this section.
"§ 95‑246.4.  Trust fund established.
(a)	There is established in the Treasury of the State, separate and apart from all public monies or funds of the State, a family and employment security trust fund which shall be administered by the State Treasurer exclusively for the purposes of this Article. All payments pursuant to this Article shall be paid into the trust fund, and all disability benefits payable under this Article shall be paid from the trust fund. The trust fund shall consist of the following:
(1)	All contributions collected pursuant to this section, together with any interest thereon.
(2)	Interest earned on any monies in the trust fund.
(3)	Any property or securities acquired through the use of monies belonging to the trust fund.
(4)	All earnings of such property and securities.
(5)	All monies transferred into the trust fund from the family and employment security administrative account.
(6)	All other monies received for the trust fund from any source.
(b)	There is established in the Treasury of the State, separate and apart from all public monies or funds of the State, a family and employment security administrative account which shall be administered by the State Treasurer exclusively for the purposes of this Article. The administrative account shall consist of the following:
(1)	All contributions collected pursuant to this section, together with any interest thereon.
(2)	All fines and penalties for the administrative account pursuant to this Article.
(3)	All monies collected by way of subrogation.
(4)	Interest earned on any monies belonging to the administrative account.
(5)	Any property or securities acquired through the use of monies belonging to the administrative account.
(6)	All earnings of such property and securities.
(7)	All monies appropriated to the administrative account by the legislature.
(8)	All other monies received for the administrative account from any source.
(c)	The State Treasurer shall be the treasurer and custodian of the family and employment security trust fund and the family and employment security administrative account and shall administer the trust fund and administrative account. All monies in the trust fund and administrative account shall be held in trust for the purposes of this Part only and shall not be expended, released, appropriated, or otherwise disposed of for any other purpose. Monies in the trust fund and administrative account may be deposited in any depository bank in which general funds of the State may be deposited, but such monies shall not be commingled with other State funds and shall be maintained in separate accounts on the books of the depository bank. Such monies shall be secured by the depository bank to the same extent and in the same manner as required by the general depository law of the State, and collateral pledged for this purpose shall be kept separate and distinct from any other collateral pledged to secure other funds of the State. The trust fund shall maintain an annualized amount of at least one hundred forty percent (140%) of the previous year's expenditure.
(d)	The State Treasurer shall pay all expenses incurred in administering the provisions of this Article. In the event that the balance in the family and employment security trust fund shall at any time be insufficient to pay disability benefits under this Article, the Governor, upon the State Treasurer's request, shall cause such sums as may be required for the payment of such disability benefits to be transferred from the family and employment security administrative account to the family and employment security trust fund.
(e)	Expenditures of monies in the family and employment security trust fund shall not be subject to provisions of the State Budget Act. Benefits shall be paid from the trust fund upon warrants drawn upon the State Treasury by vouchers approved by the Commissioner of Labor.
(f)	The State Treasurer may, from time to time, invest such monies in the family and employment security trust fund as are in excess of the amount deemed necessary for the payment of disability benefits for a reasonable future period. Such monies may be invested in bonds of any political or municipal corporation or subdivision of the State, or any of the outstanding bonds of the State, or invested in bonds or interest‑bearing notes or obligations of the State, or of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest (or in federal land bank bonds or joint stock farm bonds). The investments shall at all times be so made that all the assets of the trust fund shall always be readily convertible into cash when needed for the payment of disability benefits. The treasurer shall have the power to dispose of securities or other properties belonging to the trust fund when needed for the payment of disability benefits.
(g)	Temporary disability and family care benefits shall be paid from the family and employment security trust fund to eligible individuals. Disability benefits shall also be paid from the trust fund to an employee who is entitled to receive such disability benefits but cannot because of the bankruptcy of his employer or because the employer is not in compliance with this Article. Disability benefits paid from the trust fund to such employee may be recovered through bankruptcy proceedings or from the noncomplying employer. The treasurer shall institute administrative and legal action to effect recovery of such disability benefits.
(h)	For the purpose of accumulating funds for the payment of temporary disability and family care benefits, and administrative costs, each employer shall in the first year after the date the employer becomes subject to this Article, and each year thereafter, pay amounts as determined by the Treasurer. Each employer shall transmit all such payments to the trust fund or administrative account in such manner, at such time, and under such conditions as shall be prescribed by regulations.
(i)	On or before October first of each year, the Treasurer shall certify to the Secretary of the Executive Office of Labor and Workforce Development the estimated costs for the coming year of disability benefits and for administrative services provided by the division. Said rates of employer contribution to both the trust fund and the administrative account as established by this Article shall be adjusted annually as consistent with the needs of the operation of said trust fund and administrative account.
(j)	An employer to whom the division has sent a request for wage and employment information for an employee claiming temporary disability or family care benefits under this Article shall complete and file such information within 10 days from the date the request was sent. If an employer does not respond within 10 days, that employer may be held liable for any and all related costs incurred by the State.
"§ 95‑246.5.  Information and posting requirements.
(a)	Every employer subject to this Article shall keep posted in a conspicuous place or places on its premises a workplace notice prepared or approved by the division which shall set forth excerpts from this Article and other information the division deems necessary to explain the Article. The workplace notice shall be issued in English, Spanish, Chinese, Haitian Creole, Italian, Portuguese, Vietnamese, Laotian, Khmer, Russian, and any other language that is the primary language of at least 10,000 or one‑half of one percent (0.5%) of all residents of the State. Each employer with five or more employees whose primary language is not English shall post the workplace notice in that language, if such notice is available from the division.
(b)	Each employer shall issue to each employee, within 30 days from date of the employee's first day of work, written information provided or approved by the division which explains the availability of temporary disability and family care leave, and temporary disability and family care benefits provided pursuant to this Article.
(c)	Each employer shall issue to each employee taking temporary disability or family care leave, as soon as practicable, but not more than 30 days from the date that the employee gives notice of leave, written information provided or approved by the division, which shall contain the name and mailing address of the employer; the identification number assigned to the employer by the division; information describing the availability of temporary disability and family care benefits provided pursuant to this Article; instructions on how to file a claim for disability benefits; the address and telephone number of the regional office of the division which serves the recipient; and the telephone number of the division. Delivery is made when an employer provides such information to an employee in person or by mail to the employee's last known address.
(d)	Any employer who fails to comply with the provisions of subsection (a) or (b) of this section shall be punished by a fine of not less than fifty dollars ($50.00) nor more than three hundred dollars ($300.00). A subsequent violation of this subsection by the same employer shall be punished by a fine of not less than two hundred fifty dollars ($250.00) nor more than one thousand dollars ($1,000). Where an employer fails to comply with this provision, an employee shall be deemed to have provided notice of leave under this Article. The employer shall have the burden of demonstrating compliance with subsections (a) and (b) of this section.
(e)	The waiting period for an employee who did not receive the information required by this Article and who failed to file timely for disability benefits shall be the initial week that such employee would have been eligible to receive temporary disability benefits or family care benefits.
"§ 95‑246.6.  Construction of this Article.
This Article shall be liberally construed as remedial legislation to further its purpose of providing job‑protected temporary disability and family care leave, as well as temporary disability and family care benefits, to the employees of the State. All presumptions shall be made in favor of the availability of leave and the payment of disability benefits under this Article."
SECTION 2.  This act becomes effective July 1, 2017.