New Guidance from NC Commerce on Remote Workers under JDIG Program
Nearly two and one-half years after COVID-19 first sent people home to work, many of us continue to work from home in some form or fashion. It’s clear that there has been a permanent shift in how many of us work and where we work, especially for those with office jobs.
A clear illustration of this is the recent announcement by health insurance giant Centene that it had scrapped its plans, midway through construction, for a new $1 billion, 3,200-job East Coast headquarters in Charlotte. Company officials cited how “more people prefer working from home or in a hybrid situation” as the primary factor for that decision.
These new, hybrid work-from-home arrangements have raised questions about how these employees will be treated for incentive purposes by the state, especially under its flagship Job Development Investment Grant (JDIG) program. Recently, the North Carolina Department of Commerce put that to bed by issuing guidance on remote workers – guidance that provides flexibility and certainty to current JDIG grantees and companies that may seek one in the future.
In May 2022, the Economic Investment Committee (EIC), the governing board of the JDIG program, formally adopted JDIG guidance regarding remote and partially-remote workers. This guidance includes two policy clarifications regarding the types of employees that may qualify as “Eligible Positions” under the program (N.C. Gen. Stat. § 143B-437.51(7)).
The first clarification specifies how frequently an employee must report to the project facility to be considered a “New Employee” under a Community Economic Development Agreement (CEDA) – the formal name for a JDIG grant agreement. In part, the definition now explicitly provides that a “New Employee” is a “full-time employee hired for the Project, employed at the Facility, and reporting there at least four days a month.” Through this guidance, the new definition now applies to all CEDAs, current and future, without the need to amend prior agreements.
Secondly, the EIC approved a mechanism to allow JDIG grant recipients to count remote workers, those not reporting to the Facility at least four days a month, towards its JDIG employment requirements. Specifically, the guidance further defines a “New Remote Employee” as “a full-time employee hired for the Project, assigned to the Facility, and working from a home office within the State or a satellite location within the State.” It is important to note that the remote employee’s home or satellite office must be located in North Carolina to meet the definition.
Current JDIG grantees must apply to the Department of Commerce to amend their CEDA if they want to take advantage of this flexibility and count remote workers toward their JDIG employment requirements. Though the amendment application process is not overly burdensome, it can take significant time to work through it. Therefore, we recommend that companies start the amendment process as soon as possible, but no later than three months before the due date of their next JDIG Grantee Annual Report.
These policy clarifications are essential to companies with existing JDIGs but are equally important to North Carolina’s ability to remain competitive for future business expansion and recruitment projects.
The Nexsen Pruet Economic Development team brings decades of experience helping clients navigate the challenges of state and federal incentive programs. Although we have hit the highlights regarding the treatment of remote workers by the JDIG program, there are several additional details that companies should be aware of when considering amending their JDIG application to include remote workers. If your company needs guidance on site selection and incentives processes– the Nexsen Pruet team is prepared to help.
About Our Authors
David Spratley serves as Director of Economic Development for Nexsen Pruet. An experienced financel and economic development executive, David provides clients with guidance and services related to corporate site selection, negotiating and securing business incentives, incentives compliance and maintenance, and general economic development best practices. Before joining Nexsen Pruet, David served as the Senior Assistant Secretary for Finance at the N.C. Department of Commerce, where he managed the state’s incentives programs.
George Smith has successfully represented companies with relocation and expansion projects throughout the region, including site selection and negotiating with the state and local officials on economic development incentives. He routinely interacts with state, county and city officials, including economic and community development groups, power companies, and utility providers.
About Nexsen Pruet
Nexsen Pruet serves clients from nine offices across the Southeast. With more than 200 lawyers and professionals, the firm provides regional, full-service capabilities with international strengths.
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