North Carolina Labor Laws

In the US, the Fair Labor Standards Act (FLSA) is in place to manage the time spent by employees in the workplace, safeguarding their rights and guaranteeing fair pay for their efforts. These laws act as directives for employers, keeping them in check, and minimizing any form of abuse or exploitation.

Employees in North Carolina are offered workplace protections under both federal and state labor laws. Although the state’s time management and labor laws adhere to the regulations set by the federal FLSA, where both laws contradict, the policy with the higher standard applies. Generally, minimum wage, overtime and break laws in the state are as follows:

Employers who contravene federal or state time management laws can face severe legal ramifications, including fines, back pay, and damages. If workers feel their employer has violated federal time management laws, they can file complaints with the Department of Labor’s Wage and Hour Division for investigation and legal action.

To ensure fair hiring practices, North Carolina employers must provide equal opportunities to job seekers regardless of:

However, veterans in North Carolina can be given preferential treatment during a job application process including preferences in recruitment, wages, promotions and evaluations.

There are no limits to an employee’s (aged 18 and over) working hours in North Carolina under federal and state law. An employee’s number of work hours, schedule structures and shift durations are entirely the decision of the employer. Working overtime can be made mandatory as well. 

North Carolina is a “right-to-work” state, which gives working employees the autonomy to decide labor union membership. Employees cannot be forced to continue being a member of any labor organization, nor can an employer require an employee to abstain from joining any labor union or organization as a condition of employment. Additionally, an employer cannot obligate their employees to pay any union dues, fees, or other charges as a condition of employment. 

In North Carolina, employers and employees can terminate an employment contract at any time and for any reason under the at-will employment doctrine. However, it should be noted that any termination based on certain characteristics such as age, sex, religion, color, disability, or pregnancy is illegal. Furthermore, retaliation against employees who report violations, make complaints, or file charges of discrimination is prohibited. 

Final wages after termination must be paid before or by the next scheduled payday. If an employee’s pay is based on commissions or bonuses, they must be paid by the next scheduled pay day i.e. as soon as their pay is computable.

The following labor laws also influence employment in North Carolina:

• Health Insurance Laws: State law provides employees 18 months of continued group health insurance coverage options for employees who have been voluntarily or involuntarily terminated from their job. This includes hospital, surgical, and major medical benefits, while dental, vision care, and prescription drug benefits are not included. Employers with 20 or more employees can also offer extended group health insurance coverage under the federal COBRA. Eligible terminated employees and their dependents can continue their health benefits for up to 18 to 36 months with COBRA.
  
• Workplace Safety Laws: North Carolina has its own OSHA Plan approved by the federal Occupational Safety and Health Administration, which covers all private sector organizations except maritime terminals and employment, federal contractors and railroad workers, military establishments, and the American Red National Cross. Along with OSHA workplace safety regulations, the state plan outlines specific standards related to hazardous waste operations and emergency response, communication towers, electric power generation, transmission, and distribution, steel erection, personal protective equipment and life-saving equipment, bloodborne pathogens, communication towers, blasting and use of explosives, non-ionizing radiation, and field sanitation. It also provides on-site consultations and regular training programs to help reduce injuries and fatalities in the workplace.
• Whistleblower Protection Laws: State employees in North Carolina are protected from harassment, retaliation, and termination for reporting fraud, authority abuse, State and federal law violations, misuse of State resources, and threats to public safety to relevant authorities.  Employees wrongfully treated for whistleblowing can take civil action for any damages incurred, including payment of back wages, job reinstatement with benefits, and court and attorney costs. Private employees in the state are protected by federal whistleblower protections.

A minimum wage is the lowest pay an employer can legally pay an employee for work performed during a specific period. This amount cannot be negotiated under collective bargaining or individual contracts. 

All employees in North Carolina are entitled to receive a minimum wage of at least $7.25 per hour. This includes agriculture and domestic workers as well as employees working for state, local, and county governments. 

In North Carolina, any employee who earns more than $20 as tips or customer gratuities is considered a tipped employee.  

Employers in the state can pay tipped employees a reduced cash wage of $2.13 per hour, with a tip credit of $5.12, provided that the employee’s given advance notice and their cash wage and tips equal the state’s minimum hourly wage i.e. $7.25.

If an employee’s hourly cash wage and tips do not equal the state’s minimum wage requirement, the employer must make up the difference. 

Businesses that earn less than $500,000 in gross sales annually may allow tip pooling as long as a tipped employee receives 85% of the tips they earned during their shift. 

Since North Carolina adheres to the FLSA for payment regulations, the following individuals are considered exempt from the minimum wage provisions of the Act: 

• Bona fide executives, administrative, learned, and creative professionals who earn at least $844 per week on a salary basis
• Computer employees who earn at least $844 per week (if salaried) or $27.63 per hour
• Highly compensated employees earning $132,964 or more per year
• Outside sales employees
• Tipped workers
• Employers aged under 20, who can be paid at least $4.25 per hour for the first 90 days of work
• Full-time students, learners and apprentices who can be paid 90% of the minimum wage
• Babysitters
• Newspaper delivery workers
• Fishermen
• Federal criminal investigators
• Agricultural employees working on small farms

Employers in North Carolina can set paydays at their discretion following a daily, weekly, biweekly, semi-monthly, and monthly payment schedule. However, wages based on bonuses and commissions can be handed out infrequently, and even annually, provided the employer is given prior notice.

According to North Carolina labor statutes, employers are required to pay all non-exempt employees overtime pay at 1.5 times their regular hourly wage for all hours worked over 40 in a workweek. For tipped employees, overtime wages must be calculated based on the employee’s total wage (cash wage + tips) earned in one hour. 

Under certain conditions, state employers can provide compensatory time off (‘comp time’) instead of overtime wages to public employees. One and a half hours of comp time can be accrued for every hour worked overtime. Private sector employees cannot earn comp time.

Weighted Average Overtime in North Carolina 

If an employee works two different jobs with different wage rates, employers can calculate overtime wages by using the Weighted Average Overtime (WAOT) method. 

To calculate overtime wages for such employees:

• Compute the sum of the salaries an employee has received from both jobs in one week.
• Divide the sum of the salaries by the total number of hours worked in both jobs for the week.
• Divide the obtained hourly rate by two. This is the weighted average overtime.
• Multiply the weighted average overtime rate by the number of hours worked beyond 40 in the employee’s workweek. 

The total weekly pay for the employee will be the sum of their regular weekly pay and the wages owed after calculating the weighted average overtime.

Fluctuating Workweek Overtime in North Carolina

Some employees in North Carolina can also earn overtime pay under the Fluctuating Workweek Method (FWW). To be eligible for FWW, employees must receive a fixed salary, have fluctuating work hours, and earn at least $7.25 per hour. [/sc_fs_faq]

As of July 1, 2024, employees earning $844 weekly (or $43,888 annually) are considered exempt from overtime pay. Exempt employees under state and federal law may include:

• Bona fide executives
• Administrative employees
• Learned and creative professionals
• Computer employees who earn $27.63 per hour
• Highly compensated employees earning at least $132,964 annually
• Outside sales employees
• Government employees (under certain criteria)

However, blue-collar employees covered by the FLSA must be paid overtime wages, regardless of how high their wages may be. 

Under state and federal law, employers are not mandated to provide rest and meal breaks to employees aged 16 years or older. Employers are also not mandated to give smoke breaks or a separate location for smoking to employees. 

If an employer decides to give employees short breaks lasting for 15 minutes, they must be paid. Breaks lasting 30 minutes or longer can be deducted from an employee’s paycheck, provided that the employee is completely relieved of their job duties for the duration of the break. 

Minors aged under 16, who are employed in businesses with gross annual sales or receipts of less than $500,000 are entitled to a 30-minute break after 5 hours of work. Breaks lasting less than 30 minutes can be provided; however, they are not counted as interruptions to a minor’s work schedule.

In North Carolina, mothers are legally allowed to breastfeed in public, but there are no state regulations regarding breastfeeding at work. 

However, under the federal PUMP Act, most public and private nursing employees have the right to take reasonable time to express breast milk at the workplace for up to one year after a child’s birth. Additionally, employers must provide a non-bathroom, private space that is free from intrusion for this purpose. 

Employers with less than 50 employees may be exempt from providing breastfeeding breaks if adhering to the policy imposes significant difficulties. 

Leave entitlements in North Carolina are mostly mandated for state employees and are as follows:

• Holiday Leave: Where private employers are not mandated to provide holiday leave to their employees under state law, public employees in North Carolina are eligible to receive 12 paid holidays every year. The schedule for these holidays is set by the State Human Resources Commission. 
• Family and Medical Leave: The Family and Medical Leave Act provides eligible employees with up to 12 weeks of paid or unpaid, job-protected leave in a 12-month period. Employees can utilize this benefit to take care of a newborn, adopted, or foster child, care for a sick family member, or deal with their own illness. To avail leave under the FMLA, permanent full-time and part-time employees in North Carolina must have 12 months in service with at least 1,040 hours worked in 12 months. Temporary part-time employees must have been employed for 12 months with 1,250 hours worked in 12 months. Under the FMLA, employees can also be provided 26 weeks of military caregiver leave in a 12-month period to care for their spouse, child, parent, or next of kin who is an armed service member.
• Sick Leave: Full-time employees can earn 8 hours of sick leave per month (or 96 hours annually). Part-time employees earn sick leave at a prorated amount for scheduled work time. Employees working temporarily and for work periods less than part-time workers are not eligible for sick leave. Sick leave may be used for various reasons including physical illness and injuries, doctor appointments, child adoption, postpartum recovery and care, or bereavement following the death of a family member. To utilize sick leave, an employee must provide a medical certificate or any other proof to support leave. 
• Vacation Leave: State employees in North Carolina can receive vacation leave each year depending on the total length of their service.  Part-time employees are also eligible for vacation leave at a prorated rate. Employees can accrue a maximum of 240 hours of vacation leave till December 31st every year. If unused, these hours may be carried over to the next year. However, any hours exceeding 240 will be converted to sick leave. Upon termination, employers are required to pay discharged employees any accumulated vacation leave.
• Family Illness Leave: This policy provides up to 52 weeks of unpaid leave in a five-year period for an employee to care for a child, parent, or spouse with a serious health condition.  Employees in North Carolina can use family illness leave once they exhaust their FMLA leave. Eligible employees for this benefit include full-time and part-time workers who have been employed for 12 months with 1,040 hours in pay status within a 12-month period. Even though this leave is unpaid, employers can still choose to offer pay for this leave and even allow an employee to utilize their vacation, bonus, sick and voluntary leave, or earned comp time off for this purpose. 
• Paid Parental Leave: State employees who become new parents after the birth of a child can take up to eight weeks of paid parental leave to recover from childbirth and bond with their newborn. Additionally, state employees who become parents after the adoption, or legal and foster placement of a child are allowed up to four weeks of paid leave to care for and bond with their child. 
• Voluntary Shared Leave: State employees can choose to use voluntary shared leave if they or an immediate family member is experiencing a prolonged medical condition. Employees can continue to use up to 1,040 hours of shared leave once vacation and sick leave exhausts or can opt to receive this amount of leave repeatedly (if required). Employers can also provide up to 2,080 hours every month, with certain exceptions. Employees who wish to donate their leave hours must be in active service of the state and have a job with a sufficient leave balance. A single employee can donate four to 1,040 hours of sick leave to a family or non-family member, provided that the donor’s leave balance does not fall below 40 hours. 
• Military Leave:  State employees enlisted in the armed forces can utilize different types of paid and unpaid military leave based on the nature of their service. They can receive up to 120 hours of paid leave per year for active duty training, inactive duty training, and physical examinations. For reserve active duty, they may receive up to 30 days of paid leave. After 30 days, employees can receive differential pay i.e. wages equal to the difference between the employee’s annual salary and military pay. Employees continue to accrue vacation and sick leave while they are away for military duty. 
• Jury Duty Leave: Full-time and part-time employees (who work more than half-time) can take paid civil leave for jury service. They are also entitled to full compensation as well as any fees earned for their duty. If jury duty is required on a day off, then the employee may not take jury leave. Additionally, any hours spent for jury service are not counted towards the employee’s total weekly work hours. Once jury duty is completed, the employee must promptly report back to work on the next scheduled workday. 
• Donor Leave: Employees in North Carolina can be given 24 hours of paid leave for blood donations, bone marrow transplants, and pheresis procedures. For organ donations, employees can take 30 days off with pay.
• Volunteer Service Leave: Employees volunteering for disaster relief services with the American Red Cross are eligible for up to 15 days of paid leave within a 12-month period. Employees on disaster relief leave retain their job positions and accrue vacation and sick leave while they are away. However, time spent volunteering is not considered work. 
• Community Service Leave: State employees can also take community service leave to volunteer in schools, non-profit organizations, and other community-related services. Full-time employees can use up to 24 hours of leave whereas part-time employees earn leave prorated following a full-time employee’s allowance.  

State employees in North Carolina are entitled to the following public holidays in 2024:

Any individual who is under the age of 18 is considered a minor in North Carolina. Minors aged under 18 are prohibited by law to work in occupations that can pose harm to their well-being. 

Minors aged under 14 may be allowed to work if they are employed in a parent’s business, newspaper delivery, modeling, acting, or theatre productions.

Work Permits for Minors in North Carolina

Minors seeking employment in North Carolina must first obtain a ‘youth employment certificate’ from the North Carolina Department of Labor’s Wage and Hour Bureau. 

A youth employment certificate can be applied for online and must be signed by the minor, their parent or legal guardian, and the employer before the minor begins work. Employers must maintain these certificates for at least three years after a minor’s employment ends or when they turn 18.  

North Carolina follows federal regulations when establishing workhour policies for minors. Workhour restrictions are based on the minor’s age and are as follows: 

For Minors aged 14 and 15

• When school is in session:  Can work up to three hours a day (outside school hours), scheduled between 7 a.m. and 7 p.m. Total weekly hours must not exceed 18. 
• When school is not in session: Can work up to eight hours a day scheduled between 7 a.m. and 7 p.m. From June 1 to Labor Day, work hours can be scheduled between 7 a.m. and 9 p.m. Weekly hours cannot exceed 40. 

Minors aged 14 and 15 must also be provided a 30-minute break after working for five hours consecutively. 

For Minors Aged 16 and 17

• When school is in session: Cannot be employed between 11 p.m. and 5 a.m. if the child has school the next day. This rule can be waived if the employer obtains written permission from the minor’s parents/guardian and school principal.