Bill
SB 1041
Modernize NC state HR to be competency-based, decentralize implementation with OSHR/SHRC oversight, expand flexibility, benefits, and streamlined hiring.
Purpose and overall aim
- SB 1041 proposes to modernize and decentralize North Carolina’s state human resources system, consolidating centralized policy with increased agency flexibility and accountability. The act is designed to create a modern, cost-neutral (to the state) framework for human resources across executive branch agencies, including state universities and entities funded in part by federal funds (with local flexibility noted).
Key provisions and changes
1) Establishment of a new public workforce framework
- Creates Chapter 126A, the Public Workforce Modernization Act, prescribing goals, definitions, and a structured state HR system.
- Emphasizes a decentralized model where appropriate, under the Governor’s direction, with OSHR (Office of State Human Resources) and the State Human Resources Commission (SHRC) guiding policy, while agency Heads implement rules locally.
2) Governance and oversight
- State Human Resources Commission (Article 2, §126A-20 to §126A-21):
- Nine-member commission with appointments by the General Assembly and Governor, including representation from private sector, veterans, and local government.
- Establishes meeting, quorum, and leadership provisions; assigns oversight responsibilities to OSHR.
- Office of State Human Resources (OSHR) (Article 2, §126A-21):
- OSHR sits within the Governor’s Office for organizational purposes.
- Responsibilities include policy development, training, technical assistance, decentralization agreements, centralized programs, and compliance monitoring.
- Authority to charge fees for services.
3) Classification, minimum qualifications, and hiring (Articles 3 and 4)
- Classification system ( §§ 126A-30 to 126A-32 ):
- SHRC may establish position classifications, minimum qualifications, and a process for classification/reclassification.
- Encourages hiring based on demonstrated competencies rather than solely on years of experience.
- Reducing barriers to state employment ( §126A-31 ):
- Regular assessment of education/experience requirements; explore reducing unnecessary barriers; remove four-year degree requirements where not essential.
- Agency flexibility to classify within the SHRC framework.
- Appointment types and personnel status ( §126A-33, §126A-34 ):
- Defines permanent vs non-permanent appointments (including probationary, career, permanent experiential, permanent exempt, temporary, time-limited, non-permanent experiential).
- Specifies probationary periods and pathways to career status, including for special tracks (law enforcement, UNC employees with exemptions, etc.).
- Rules allow time-limited to become permanent under certain conditions.
4) Compensation and benefits (Articles 4)
- Compensation oversight ( §126A-40 ) and agency flexibility ( §126A-41, §126A-42 ):
- SHRC may set salary ranges, pay structures, bonuses, and performance-based pay.
- Agencies retain flexibility to set salaries within SHRC-determined ranges, with enforcement provisions to prevent noncompliance.
- Additional 10% flexibility for certain exempt policymaking/managerial roles ( §126A-42 ).
- Minimum salary and other pay standards ( §126A-43 ):
- Sets a new minimum salary floor of $31,200 for full-time state employees not on leave.
5) Recruitment, hiring, and onboarding (Article 5 and 6)
- Recruitment and hiring oversight ( §126A-50 to §126A-56 ):
- SHRC may standardize posting, applications, recruitment, selection, transfers, and postings across agencies.
- Emphasis on open, fair competition and diversity; training for personnel involved in hiring.
- Various hiring flexibilities: hiring from pools of qualified candidates, cross-agency postings, and work-based learning programs (including apprenticeships).
- Priority orders for hiring (e.g., promotions, reemployment rights, veterans’ preferences).
- Verification and onboarding ( Articles 6, §§ 126A-60 to 126A-63 ):
- Onboarding standards, eligibility verification to work in the U.S. (E-Verify mandatory for state entities, with OSHR-run centralized access).
- Fraudulent disclosure penalties and a 90-day credential verification window.
6) Benefits, terms, and flexible options (Articles 7)
- Paid parental leave ( §126A-71 ):
- Up to 12 weeks of paid parental leave after birth or qualifying event, with prorating for part-time employees and rules for eligibility, multiple uses, and non-cash value (no impact on retirement calculations).
- Other benefits and flexible work options ( §126A-72 and §126A-73 ):
- Hours, leave, holidays, and flexibilities (telework, job sharing, varied schedules, etc.).
- Paid holidays include Martin Luther King Jr. Day and Veterans Day; up to 13 paid holidays per year (with three on Christmas, per the bill’s phrasing).
- Voluntary shared leave and flexible compensation (Articles 7, §§ 126A-75, 126A-76 ):
- Programs for employees to donate or share leave with family or colleagues.
- Flexible compensation options (dependent care assistance and other benefit structures) with potential salary reductions funded by OSHR-approved arrangements.
7) Disciplinary actions and grievance processes (Article 8)
- OSHR oversight of just cause, disciplinary actions, and grievances ( §126A-80 ):
- SHRC authority to define just cause, disciplinary procedures, and related processes.
- Provisions for appeals, settlements, and alternative dispute resolution.
- Just cause standards ( §126A-81 ):
- Clear criteria for disciplinary actions, including evaluations of conduct, work history, and proportionality of discipline.
Procedural and timeline notes
- Reporting: Beginning January 15, 2027, OSHR must annually report state workforce metrics to multiple legislative committees (State Operations, Fiscal Research, and Appropriations) on compensation trends, costs of grievances/litigation, and Temporary Solutions program compliance.
- Implementation: The act contemplates phased development of decentralized agreements, classification reforms, onboarding standards, and benefit policies subject to Governor approval and ongoing Commission directives.
Impact and who is affected
- Affects executive branch agencies, UNC system employees, and other state entities funded with federal or local funds, with some local flexibility.
- Increases agency responsibility for HR actions, while expanding central policy and oversight through OSHR and SHRC.
- Introduces new competency-based hiring, reduced degree requirements where feasible, expanded parental leave, flexible work arrangements, and defined performance-based compensation considerations.
Note: The bill includes several placeholders (“Reserved for future codification”) and would require follow-up to see exact implementation timelines and any amendments adopted during the legislative process.
Compiled from official sources — confirm details with the bill’s official record.
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