Healthy Families & Workplaces/Paid Sick Leave
Senate Bill 635 would create a new Article in Chapter 95 of the North Carolina General Statutes establishing a statewide earned paid sick leave requirement for covered employees. The bill provides that employees begin accruing paid sick time at the start of employment at a rate of one hour for every 30 hours worked, with annual accrual caps of 32 hours for employees of small businesses and 56 hours for employees of larger employers. Accrued leave carries over from year to year within those caps, and previously accrued unused leave must be reinstated if an employee is rehired within 90 days.
The bill allows paid sick time to be used for an employee’s own illness or medical care, care for an immediate family member, and certain needs arising from domestic violence, sexual assault, or stalking, including medical care, counseling, relocation, and legal services. It also includes notice, posting, recordkeeping, and anti-retaliation requirements, and authorizes enforcement by the Commissioner of Labor and private civil actions. The effective date is January 1, 2026, and the bill delays application for employees covered by existing collective bargaining agreements until those agreements expire or are modified.
If enacted, the bill would add a new statewide labor standard in North Carolina requiring most employers to provide earned paid sick leave and would amend the state’s retaliation statute to expressly protect workers asserting rights under the new article. It would affect employer leave policies, payroll and recordkeeping practices, and employee rights to take protected leave without retaliation. The bill also preserves more generous employer policies and does not require payout of unused sick leave at separation.
The bill’s stated findings and structure reflect strong support for paid sick leave as a public health, family stability, and worker protection measure. The text emphasizes benefits for disease prevention, child care, domestic violence survivors, and low-wage workers, suggesting the sponsors view the policy as a broad workplace and health safeguard. No committee transcripts or recorded votes were provided, so there is no additional documented legislative debate or formal vote sentiment in the supplied materials.
The main points of likely contention are the mandate on employers, especially small businesses, and the costs and administrative burdens associated with accrual, notice, documentation, and enforcement. The bill tries to address some of those concerns by setting lower annual caps for small businesses, allowing existing PTO policies to satisfy the requirement if they are equivalent, and delaying coverage for workers under existing collective bargaining agreements. Another possible area of dispute is the scope of qualifying uses, particularly leave related to domestic violence, sexual assault, and stalking, and the extent of employer verification rights versus employee privacy protections.