North Carolina Wage Regulations, Sick Pay and Overtime

Wage Regulations in North Carolina. North Carolina is a bit of a gem in its business?regulations?in that it leaves the pay relationship between the employer and employee for the most part.? The NC Legislature has enacted some common sense regulations, however, to keep the employer / employee relationship honest and fair.? Here’s a snapshot.

MINIMUM WAGE REGULATIONS

Pretty simply put, North Carolina has adopted the Federal minimum wage set out in the Fair Labor Standards Act, which is currently $7.25/hour.? There are exceptions, for example the wage rate an employer can pay “full time students, learners, apprentices, and messengers” is 90% of the minimum wage.? Additionally, employers may pay wages based on “bonuses, commissions, or other forms of wage calculation” instead of the minimum wage, allowing for tipped employees such as waitstaff, or commissioned employees such as salespeople.

OVERTIME

Overtime in North Carolina is a straightforward “time and a half” pay for hours worked over 40 in a workweek.? An exception is for employees at “seasonal recreational and amusement establishments”, i.e., carnivals or pools, at which point the time and a half pay kicks in after 45 hours instead of 40.? An employer in the private sector cannot offer comp-time in lieu of time and a half pay.

Additionally, the OT regulations do not apply to certain defined classes of people, such as baby sitters, Pages employed in the NC General Assembly (go figure!), volunteers, inmates, models and actors working in the business, fisherman, there’s a whole list of classes of workers who traditionally are not paid “time and a half”.

SICK, VACATION, AND “OTHER AMOUNTS” OF PAY

North Carolina does not require an employer to offer paid sick, vacation or other such days.? If an employer wants to give this to employees as a benefit, N.C. only requires that the benefit be put in writing and given to the employees. N.C. does not require that benefit to be in any particular form.? For example, an employer can give “one vacation day for each three month period employed”. Or it can give “one 8 hour vacation day for every 160 hours worked”.

Also, an employer is not required to allow an employee to “cash out” sick/vacation days. That is, an employer does not have to allow an employee to take pay instead of days off for accrued but unused sick/vacation.? In fact, an employer can put in its policy that earned but unused days are forfeited after a certain event.? For example, “No employee may accrue more than ten vacation days”. This means once ten are accrued and unused, the employee will actually stop accruing more days.

Again, the employer/employee can define the sick/vacation benefit however they want. The only NC requirement is that it be put in writing.? Once earned the employee has a right to the defined benefit, and an employer cannot make retroactive changes to a benefit.

The NC DOL has set forth in a rule what must be included in a “vacation pay” benefit, if the employer chooses to offer one.? This includes: how and when the vacation is earned. Whether or not days can be carried forward and if so how much. When vacation must be taken. Whether the employee can elect pay in lieu of days off. And under what conditions vacation can be forfeited.

"Other" pay related benefits can include bereavement leave; paid training classes or seminars; paid family leave for involvement in schools (a unique N.C. law); or similar such perqs of employment.

ENFORCEMENT

North Carolina’s employment laws allow for an employee (or the NC Commissioner of Labor) to sue an employer for violations of the minimum wage, overtime, and benefit pay acts.? The employee can receive as compensation for such violation: his unpaid wages plus interest; the same amount over again as a penalty; costs, fees, and attorney’s fees.

Contact me for help setting up and operating the legal aspects of your business. In western North Carolina, Asheville, Waynesville, Hendersonville at (312) 671-6453.

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