Many employers have heard the buzz about the recently enacted North Carolina legislation commonly referred to as “HB 2” and wonder how the bill affects their responsibilities as employers.  The bill, also known as the Public Facilities Privacy & Security Act, requires little action from private and public employers in the employment context, though public agencies and schools may have to alter restroom policies to ensure conformity with the new regulations.  There are three important takeaways from HB 2 of which public and private employers should be aware:

  1. Municipalities can no longer impose stricter labor or non-discrimination laws upon private employers or companies contracting with the municipality than those garnered by the North Carolina legislature. For example, if the N.C. legislature does not outlaw discrimination against X class of persons, a municipality cannot independently impose regulations against discrimination of that class of persons.
  2. All claims of discrimination against employers may only be brought through the EEOC or Human Relations Commission as provided in a separate agreement between the federal and state agencies, eliminating the common law wrongful discharge in violation of public policy cause of action for claims based on discrimination, and
  3. Schools and public agencies are now required to regulate bathroom use by biological sex as defined by birth certificates, with a few exceptions. The Act specifically denotes regulation of bathroom facilities by biological sex as not discriminatory.

Municipalities

Municipalities and local governing bodies are likely the most affected by the new legislation.  Though the Act creates exceptions to allow municipalities to control their own internal employment policies, the bill specifically preempts local municipalities, counties, and cities from creating policies or ordinances that would regulate any aspect of compensation of private employees within their jurisdiction, including increasing the local minimum wage.  Additionally, local governing bodies cannot require contractors to have any certain employment or anti-discrimination practices as a prerequisite for bidding on contracts.  Municipalities are also subject to the provision requiring regulation of bathroom and changing facilities based on biological sex.

Private Employers

Private sector employers and municipal employers are both still free to regulate their own employees and create internal policies that provide additional protections not granted by the State.  Additionally, the bill does not require regulation of bathroom and changing facilities of private companies according to biological sex.  Private entities, even those that are considered places of public accommodation, can implement a restroom policy independent of that required for public agencies and schools.  Because municipalities cannot regulate employment compensation under HB 2, private employers remain subject only to the state mandated minimum wage.

Public Agencies and Schools

All state public agencies (including municipalities) and public schools are now required to regulate multiple stall bathroom and changing facility use by biological sex as indicated on an individual’s birth certificate.  This requires any transgender individual to use restrooms and changing facilities on the basis of his or her biological sex, regardless of how that person looks or presents him or herself.  Exceptions include single occupancy, unisex facilities, maintenance or cleaning personnel, and those assisting others with the facilities.

For the full text of House Bill 2, please click here.