North Carolina

Labor Compliance Guide

Hours & Pay Regulations

Normal Working Hours

There are no wage and hour laws that limit the number of hours that a person 18 years of age or older can work either by the day, week, or the number of days in a row, or that require breaks for employees 16 years of age or older. An employer is free to adjust the hours of its employees regardless of what the employees are scheduled to work. The rules are the same for a large corporation or a small mom-and-pop business. Neither the N. C. Wage and Hour Act nor the federal Fair Labor Standards Act (FLSA) limit the number of hours that an employee 18 years of age or older can be required to work either by the day, week, or a number of days in a row.

 

There are no limitations on how many hours an adult employee can be required to work regardless whether they are a salaried-exempt employee or a non-exempt employee. The employer is only required to pay time and one-half overtime pay based on an employee’s regular rate of pay for all hours worked in excess of 40 in a workweek to its non-exempt employees. There is no limit on the number of hours the adult employee may be required to work.

 

The decision to work employees in eight-hour shifts, 12-hour shifts, 16-hour shifts, etc., is entirely up to the employer. The decision to call an employee back in to work on a scheduled day off is entirely up to the employer. An employer can make the working on a scheduled day off or working a full shift as a condition of employment regardless of an employee’s start-time or end-time. An employer can make the working of overtime hours as a condition of employment. Since an employer can make the working of overtime mandatory, the employer can terminate an employee if the employee refuses to work overtime regardless of how many hours the employee has already worked that day or workweek.

 

The employer does not have to give its employees any advanced notice of having to work extra hours. An employer can inform its employees that they have to work overtime at the last minute. The employer does not have to take into consideration how the work schedule will affect an employee’s personal life.

Overtime

Fluctuating workweek overtime pay is a way to comply with the overtime pay requirements of time and half pay for all hours worked in excess of 40 in a workweek when an employee’s time fluctuates from week to week. Employers whose employees work a lot of hours part of the year and very little hours a week another part of the year usually use it.

 

The employee must be on a guaranteed weekly salary which is paid to the employee as long as the employee performs any work in the workweek. No pay is required for a workweek in which the employee is out for the entire workweek and performs no work in that workweek. Pay periods can still be bi-weekly, semi-monthly, or monthly; but the work hours have to be computed weekly to determine the hours worked each workweek.

Annual Leave

No employer is required to provide annual leave pay plans for employees. However, if an employer provides these promised benefits for employees, the employer shall give all annual time off or payment in lieu of time off in accordance with the company policy or practice. Employees shall be notified in accordance with any policy or practice which requires or results in loss or forfeiture of vacation time or pay. Employees not so notified are not subject to such loss or forfeiture.

Minimum Wage

Employees must be paid at least $7.25 an hour or the federal minimum wage, whichever is higher. Before July 24, 2009, the minimum wage was $6.55 an hour.

 

Full-time students, apprentices, learners, and messengers can be paid 90 percent of the minimum wage; seasonal employees can be paid 85 percent. The Labor Department also can establish a wage rate less than the minimum for persons whose earning or productive capacity is impaired by age or physical or mental deficiency or injury.

Tips & Gratuities

Employers must pay tipped employees cash wages of at least $2.13 an hour; if tips are not sufficient to make up the minimum wage, employers must pay the difference. Employees must be notified in advance that an employer will be applying the tip credit of $5.12, and are permitted to retain all tips.

Meal Breaks

The North Carolina Wage and Hour Act does not require mandatory rest breaks or meal breaks for employees 16 years of age or older. The WHA requires breaks only for youths under 16 years of age. Youths under 16 years of age have to be given at least a 30-minute break after 5 hours, and no break of fewer than 30 minutes shall be deemed to interrupt a continuous period of work. Again, there are no required rest breaks or meal breaks at all for employees 16 years of age or older. The North Carolina law on breaks for youths under 16 years of age generally applies only to enterprises that have gross sales or receipts of less than $500,000 a year and to private non-profit organizations. It is our understanding that the federal Fair Labor Standards Act does not require that an employer give its employees mandatory rest breaks or meal breaks regardless of an employee’s age.

 

Generally, if an employer does give breaks, then the break must be at least 30 minutes for the employer to be able to deduct the time from an employee’s pay. An employer does not have to let its employees leave the employer’s premises as long as the employee is completely relieved of duty during the 30-minute break, and the employer does not have to provide a break room. An example of an employee “completely relieved of duty” is one who is completely relieved from having to wait for customers to come in or to call. Waiting for customers to come in or to call is clearly work time even if the employee is free to eat or read a magazine while they are waiting for customers or calls. Generally, breaks of less than 30 minutes, such as a 15-minute rest break, have to be paid by the employer.

Special Leave

Paid Sick Leave

According to the Healthy Families and Healthy Workplaces Act, effective July 1, 2017, any employee who works in this State and who must be absent from work shall be entitled to paid sick time. Paid sick time as provided in this section shall begin to accrue at the commencement of employment. Paid sick time shall accrue at the rate of 1 hour of pay for every 30 hours worked.

 

Paid sick time may be used as accrued or be loaned by the employer at its discretion to the employee in advance of accrual. Unless the employer and employee agree to designate otherwise, for periods of paid sick time that is less than a normal workday, the time shall be counted on an hourly basis or the smallest increment that the employer’s payroll system uses to account for absences or use of leave. For employees of small businesses, there shall be a limit of 32 hours of accrued paid sick time in a calendar year. For employees of other employers, there shall be a limit of 8 hours of accrued paid sick time in a calendar year. Accrued paid sick time for employees carries over from year to year but is limited to the aforementioned limits. When there is separation from employment and the employee is rehired within 90 days of separation by the same employer, previously accrued paid sick time that had not been used shall be reinstated. The employee shall be entitled to use accrued paid sick time and accrue additional sick time at the recommencement of employment.

 

Paid sick time shall be provided to an employee by an employer for any of the following reasons:

    • To care for the employee’s immediate family member who is suffering from a physical or mental illness, injury or medical condition that requires home care, professional medical diagnosis or care, preventative medical care, or a routine medical appointment, unless the care is covered under federal law; or
    • To care for the employee’s own physical or mental illness, injury, or medical condition that requires home care, professional medical diagnosis or care, preventative medical care, or a routine medical appointment, unless the care is covered under federal law; or
    • To allow an employee to address the psychological, physical, or legal effects on himself or herself, or an immediate family member, of domestic violence, sexual assault, or stalking.
Unpaid Leave
Employees may be eligible to take unpaid, job-protected, leave under the Family Medical Leave Act (“FMLA”). Please refer to main United States page for further details on this Federal law.
Parental Leave

Employers shall grant 4 hours per year leave to any employee who is a parent, guardian, or person standing in loco parentis of a school-aged child so that the employee may attend or otherwise be involved at that child’s school. However, any leave under this section is subject to the following conditions:

      • The leave shall be at a mutually agreed upon time between the employer and the employee.
      • The employer may require an employee to provide the employer with a written request for the leave at least 48 hours before the time desired for the leave.
      • The employer may require that the employee furnish written verification from the child’s school that the employee attended was otherwise involved at that school during the time of the leave.

Employers shall not discharge, demote, or otherwise take an adverse employment action against an employee who requests or takes leave under this section. Nothing in this section shall require an employer to pay an employee for leave taken.

Jury Duty Leave

No employer may discharge or demote any employee because the employee has been called for jury duty, or is serving as a grand juror or petit juror There is no requirement that the employer pays the employee for jury duty unless the employer has promised to do so. Jury duty is just like any other wage benefit the employer has to give it only if the employer has made a promise to do so. “Wage benefits” are benefits such as, but not limited to, vacation pay (including PTO and PDO leave), sick leave, jury duty pay, and holiday pay. If the employer has made such a promise, then the employer must have written policies on all of its promised wage benefits which have to be made available to its employees.

 

State law does not require private employers to pay employees for absences caused by jury service. Although not required to do so, many private employers pay all employees called to jury service regardless of exempt or nonexempt status. The court pays jurors a small fee, and the private employer may offset any amounts received by an employee for a particular week against the salary due for that particular week. However, special rules apply to exempt employees. Under federal law, employers typically cannot deduct an exempt, salaried employee’s pay for time spent serving on a jury, unless the employee did no work for the entire week.

Military Leave

Leave with pay, up to a maximum of 120 hours each Federal fiscal year shall be granted to members of the uniformed services for:

        • active duty for training (annual training or special schools, including an authorized training program for the National Disaster Medical System); or
        • inactive duty training (drills – usually on weekends) If the drill is not scheduled on the employee’s off-day, the employee has the option of requesting that the work schedule be rearranged, or the employee may use any unused portion of the 120 hours leave with pay, vacation/bonus leave or leave without pay.

Additional military leave needed for training shall be charged to vacation/ bonus leave or leave without pay at the discretion of the employee. When a military obligation is less than 31 days an employee is authorized eight (8) hours recoup time before and after the performance of military duties or military training. This time may also be charged to the 120 hours leave with pay, leave without pay or vacation/bonus leave. Leave with pay shall be granted for a required physical examination relating to membership in the uniformed services.

Domestic Violence Leave

No employer shall discharge, demote, deny a promotion, or discipline an employee because the employee took reasonable time off from work to obtain or attempt to obtain relief. An employee who is absent from the workplace shall follow the employer’s usual time-off policy or procedure, including advance notice to the employer, when required by the employer’s usual procedures unless an emergency prevents the employee from doing so. An employer may require documentation of any emergency that prevented the employee from complying in advance with the employer’s usual time-off policy or procedure, or any other information available to the employee which supports the employee’s reason for being absent from the workplace.

School Activity Leave

Employers shall grant four hours per year leave to any employee who is a parent, guardian, or person standing in loco parentis of a school-aged child so that the employee may attend or otherwise be involved at that child’s school. However, any leave under this section is subject to the following conditions:

        • The leave shall be at a mutually agreed upon time between the employer and the employee.
        • The employer may require an employee to provide the employer with a written request for the leave at least 48 hours before the time desired for the leave.
        • The employer may require that the employee furnish written verification from the child’s school that the employee attended or was otherwise involved at that school during the time of the leave.

Last updated on: September 21st, 2018