{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina/json", "type": "application/json" } ], "data": { "topic": "wage-and-hour", "state": "north-carolina", "frontmatter": { "title": "Wage and Hour Law in North Carolina", "description": "A question-by-question summary of North Carolina wage and hour law, covering the Wage and Hour Act minimum wage that is tied to the federal $7.25 floor with local wage ordinances generally preempted, the weekly-only overtime rule, the absence of any adult meal-or-rest-break mandate, next-payday final pay with a written-notice condition on forfeiting accrued benefits, monthly-or-more pay frequency, the itemized-deduction and advance-notice rules for wage changes, the economic-reality test for worker classification, and a full federal tip credit subject to a 15% cap on tip-pool contributions.", "state": "North Carolina", "lastReviewed": "2026-07-16", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "minimumWageFloor": "federal", "bottomLine": "North Carolina ties its minimum wage to the federal $7.25 floor and generally preempts local wage ordinances, adds no state overtime tier or adult break mandate, and requires final pay only by the next regular payday — but its Wage and Hour Act backs unpaid-wage claims with presumptive double (liquidated) damages, attorneys' fees, and a two-year deadline, tests worker status by economic reality rather than a common-law control test, and lets employers take the full federal tip credit while capping tip-pool contributions at 15%.", "keyLaw": "North Carolina Wage and Hour Act, N.C. Gen. Stat. Ch. 95, Art. 2A (§§ 95-25.1 to 95-25.25)", "dailyOvertime": "weeklyOnly", "mealRestBreaks": "none", "finalPayTiming": "nextPayday", "latePayPenalty": "liquidatedDamages", "payFrequency": "monthly", "wageStatement": "basicRequired", "workerClassificationTest": "economicRealities", "tipCredit": "fullFederalTipCredit", "currentAsOf": "2026-07-01" }, "about": [ "North Carolina wage and hour law", "North Carolina minimum wage and the federal-floor linkage", "North Carolina overtime and meal-and-rest breaks", "North Carolina final pay and the Wage and Hour Act forfeiture rule", "North Carolina worker classification (the economic-reality test)", "North Carolina tip credit" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ] }, "questions": [ { "slug": "minimum-wage", "label": "What is the state minimum wage, and how does it relate to the federal floor?", "heading": "What is the minimum wage?", "answerText": "North Carolina's minimum wage is $7.25 per hour — the same as the federal floor. The Wage and Hour Act does not set a fixed state number; instead it requires the higher of $6.15 or the federal minimum wage under the Fair Labor Standards Act, as that wage may change from time to time. Because the federal minimum has stood at $7.25 since 2009, the operative North Carolina rate is $7.25, and it will move automatically only if Congress raises the federal figure — there is no state inflation index or scheduled step-up. That $7.25 floor is the generally applicable rate; the Act authorizes limited subminimum rates for narrow categories such as learners and apprentices. North Carolina also bars cities and counties from setting a higher local minimum for private employers: the Act generally supersedes and preempts local ordinances regulating employee compensation — subject to narrow exceptions, such as a local government's regulation of its own workforce — so a private employer can rely on one statewide wage figure.", "sources": [ { "id": "nc-stat-95-25-3-minwage", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.3", "citation": "N.C. Gen. Stat. § 95-25.3(a).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.3.html", "proposition": "North Carolina sets its minimum wage as the higher of $6.15 or the federal Fair Labor Standards Act minimum wage as it changes over time, so the state rate defaults to the current federal $7.25 floor with no independent state index.", "verbatimQuote": "Every employer shall pay to each employee who in any workweek performs any work, wages of at least six dollars and fifteen cents ($6.15) per hour or the minimum wage set forth in paragraph 1 of section 6(a) of the Fair Labor Standards Act, 29 U.S.C. 206(a)(1), as that wage may change from time to time, whichever is higher, except as otherwise provided in this section.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-3-minwage" }, { "id": "nc-stat-95-25-1-preemption", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.1", "citation": "N.C. Gen. Stat. § 95-25.1(d).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.1.html", "proposition": "The Wage and Hour Act generally supersedes and preempts local-government ordinances regulating employer compensation — subject to narrow statutory exceptions (a locality's own employees, certain economic-development incentives, federal block-grant requirements, and G.S. 160D-1311 programs) that do not affect private-sector minimum wages — so no North Carolina city or county sets a higher local minimum wage for private employers.", "verbatimQuote": "The provisions of this Article supersede and preempt any ordinance, regulation, resolution, or policy adopted or imposed by a unit of local government or other political subdivision of the State that regulates or imposes any requirement upon an employer pertaining to compensation of employees, such as the wage levels of employees, hours of labor, payment of earned wages, benefits, leave, or well-being of minors in the workforce.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-1-preemption" } ] }, { "slug": "overtime", "label": "Does the state require daily overtime beyond the federal 40-hour weekly rule?", "heading": "When is overtime owed?", "answerText": "Overtime in North Carolina is weekly-only. The Wage and Hour Act requires time-and-one-half for hours worked beyond 40 in a workweek and nothing more — there is no daily-overtime tier, no double-time requirement, and no seventh-day premium. A workweek is any fixed period of 168 consecutive hours, and each workweek stands on its own, so an employer cannot average hours across a two-week pay period to avoid the premium. In practice, many North Carolina businesses run overtime on the federal rule directly, because the Act excludes enterprises engaged in commerce under the FLSA from its own minimum-wage and overtime provisions — the state rule steps in mainly to fill a gap, such as where a federal exemption has no comparable state exemption.", "sources": [ { "id": "nc-stat-95-25-4-overtime", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.4", "citation": "N.C. Gen. Stat. § 95-25.4(a).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.4.html", "proposition": "North Carolina requires overtime at one-and-one-half times the regular rate only for hours worked beyond 40 in a workweek, with no daily-overtime or double-time requirement.", "verbatimQuote": "Every employer shall pay each employee who works longer than 40 hours in any workweek at a rate of not less than time and one half of the regular rate of pay of the employee for those hours in excess of 40 per week.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-4-overtime" }, { "id": "nc-stat-95-25-14-exemptions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.14", "citation": "N.C. Gen. Stat. § 95-25.14(a)(1)c.", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.14.html", "proposition": "Under the Wage and Hour Act's exemption provision, an FLSA-covered enterprise is generally excluded from the state minimum-wage and overtime provisions, but a worker exempt from the FLSA's minimum-wage, overtime, or child-labor requirements who has no comparable state exemption is not exempt under state law — the state rules fill that gap.", "verbatimQuote": "any employer or employee exempt from the minimum wage, overtime, or child labor requirements of the Fair Labor Standards Act for whom there is no comparable exemption under this Article shall not be exempt under this subsection", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-14-exemptions" } ] }, { "slug": "meal-rest-breaks", "label": "Are meal and rest breaks mandated, and are they paid?", "heading": "Are breaks required?", "answerText": "No — not for adults. North Carolina has no statute requiring meal periods or rest breaks for employees 18 and older; break policy is left to the employer and to the FLSA rules on which breaks count as paid time. The only break mandate in the Wage and Hour Act is for children: a youth under 16 may not work more than five consecutive hours without a rest interval of at least 30 minutes — and even that yields to federal law, because an establishment subject to the FLSA's child-labor regulations follows those rules instead of the state youth-employment section. There is no state missed-break premium for adults — because there is no adult break to miss, the only question when a break is skipped is whether the time counts as hours worked under federal law.", "sources": [ { "id": "nc-stat-95-25-5-youthbreak", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.5", "citation": "N.C. Gen. Stat. § 95-25.5(e).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.5.html", "proposition": "North Carolina's only statutory break mandate is for minors: a youth under 16 may not work more than five consecutive hours without at least a 30-minute rest interval, and a period under 30 minutes does not interrupt the continuous work period; adults have no state meal-or-rest-break entitlement.", "verbatimQuote": "No youth under 16 years of age shall be employed for more than five consecutive hours without an interval of at least 30 minutes for rest. No period of less than 30 minutes shall be deemed to interrupt a continuous period of work.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-5-youthbreak" }, { "id": "nc-stat-95-25-5-flsa-childlabor", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.5", "citation": "N.C. Gen. Stat. § 95-25.5(k).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.5.html", "proposition": "An establishment required to comply with or subject to the FLSA's child-labor regulation is exempt from the state youth-employment section (including the under-16 break rule in subsection (e)), except for a few listed provisions — so the state break mandate reaches only youth employment the FLSA child-labor rules do not already cover.", "verbatimQuote": "Persons and establishments required to comply with or subject to regulation of child labor under the Fair Labor Standards Act are exempt from all provisions of this section, except the certificate requirements of subsection (a), the provisions of subsection (a1), the prohibition from occupations found and declared to be detrimental by the Commissioner of Labor pursuant to subsection (b), and the prohibitions of subsection (j).", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-5-flsa-childlabor" } ] }, { "slug": "final-pay", "label": "When must final wages be paid on separation, and what is the penalty for paying late?", "heading": "When is final pay due?", "answerText": "North Carolina uses one timing rule for every covered worker: an employee whose job ends for any reason — quit, layoff, or discharge — must be paid all wages due on or before the next regular payday. There is no accelerated deadline for a firing and no separate rule for a resignation. Pay that cannot yet be calculated, such as a trailing commission or bonus, is due on the first regular payday after it becomes calculable. The trap is forfeiture: where an employer has promised vacation, bonuses, or similar benefits by policy or practice, it may not forfeit them on separation unless it gave the employee prior written notice of the forfeiture policy — without that notice, the benefit must be paid out.", "sources": [ { "id": "nc-stat-95-25-7-timing", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.7", "citation": "N.C. Gen. Stat. § 95-25.7.", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.7.html", "proposition": "An employee separated for any reason must be paid all wages due on or before the next regular payday, with no accelerated deadline distinguishing a discharge from a voluntary quit; amounts not yet calculable are due on the first regular payday after they become calculable.", "verbatimQuote": "Employees whose employment is discontinued for any reason shall be paid all wages due on or before the next regular payday either through the regular pay channels or by trackable mail if requested by the employee in writing.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-7-timing" }, { "id": "nc-stat-95-25-7-forfeiture", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.7", "citation": "N.C. Gen. Stat. § 95-25.7.", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.7.html", "proposition": "Accrued wages such as vacation or bonuses may not be forfeited on separation unless the employee received prior written notice of the forfeiture policy under G.S. 95-25.13; an employee not so notified keeps the benefit.", "verbatimQuote": "Such wages may not be forfeited unless the employee has been notified in accordance with G.S. 95-25.13 of the employer's policy or practice which results in forfeiture. Employees not so notified are not subject to such loss or forfeiture.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-7-forfeiture" } ] }, { "slug": "late-pay-penalty", "label": "What is the penalty for paying wages late or not at all?", "heading": "What is the penalty for underpaying?", "answerText": "North Carolina does not use a daily waiting-time penalty; instead it doubles the damages. An employer that violates the minimum-wage, overtime, or wage-payment provisions owes the unpaid amount plus interest, and the court shall award liquidated damages equal to the unpaid wages — effectively doubling the liability — unless the employer proves the violation was in good faith and on reasonable grounds. A claim must be brought within two years, a shorter window than the federal FLSA's three-year reach for willful violations.", "sources": [ { "id": "nc-stat-95-25-22-liquidated", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.22", "citation": "N.C. Gen. Stat. § 95-25.22(a1).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.22.html", "proposition": "On a minimum-wage, overtime, or wage-payment violation the court must award liquidated damages equal to the unpaid amount (doubling the liability), unless the employer proves the violation was in good faith and on reasonable grounds, in which case the court may reduce or deny the doubling.", "verbatimQuote": "In addition to the amounts awarded pursuant to subsection (a) of this section, the court shall award liquidated damages in an amount equal to the amount found to be due as provided in subsection (a) of this section, provided that if the employer shows to the satisfaction of the court that the act or omission constituting the violation was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of this Article, the court may, in its discretion, award no liquidated damages or may award any amount of liquidated damages not exceeding the amount found due as provided in subsection (a) of this section.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-22-liquidated" }, { "id": "nc-stat-95-25-22-sol", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.22", "citation": "N.C. Gen. Stat. § 95-25.22(f).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.22.html", "proposition": "A Wage and Hour Act recovery action must be brought within two years under G.S. 1-53, a shorter limitations period than the federal FLSA's three-year window for willful violations.", "verbatimQuote": "Actions under this section must be brought within two years pursuant to G.S. 1-53.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-22-sol" } ] }, { "slug": "pay-frequency", "label": "How often must workers be paid?", "heading": "How often must workers be paid?", "answerText": "North Carolina lets an employer choose its own pay cadence, as long as it pays on a regular payday. Wages and tips accrue and are due on the regular payday, and pay periods may be daily, weekly, bi-weekly, semi-monthly, or monthly — so a monthly payroll is permitted for any covered employee class, exempt or not. Bonuses, commissions, and similar calculated amounts may be paid as infrequently as annually if that schedule is set in advance. Unlike states that force manual or lower-wage workers onto a weekly or semi-monthly cycle, North Carolina imposes no occupation-based frequency classes.", "sources": [ { "id": "nc-stat-95-25-6-payfrequency", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.6", "citation": "N.C. Gen. Stat. § 95-25.6.", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.6.html", "proposition": "Employers must pay all wages and tips on the regular payday, and pay periods may be daily, weekly, bi-weekly, semi-monthly, or monthly — with no occupation-based frequency classes — while bonuses and commissions may be paid as infrequently as annually if prescribed in advance.", "verbatimQuote": "Every employer shall pay every employee all wages and tips accruing to the employee on the regular payday. Pay periods may be daily, weekly, bi-weekly, semi-monthly, or monthly. Wages based upon bonuses, commissions, or other forms of calculation may be paid as infrequently as annually if prescribed in advance.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-6-payfrequency" } ] }, { "slug": "wage-statements", "label": "What must a pay stub or wage notice show?", "heading": "What must a pay stub show?", "answerText": "North Carolina's pay-stub rule is narrower than many payroll teams expect. The only thing the Wage and Hour Act requires an employer to furnish on the stub is an itemized statement of deductions taken from wages for each pay period in which deductions are made. The statute does not compel the stub to show hours, rate, or gross-versus-net breakdowns. What the Act does require, up front, is written notice at hire of the promised wages and the payday, and — the piece employers most often miss — at least one full pay period of advance written notice before any change in promised wages, with a cut taking effect only prospectively while a raise may be applied retroactively without notice. Behind the scenes, the North Carolina Administrative Code separately requires the employer to keep detailed records — regular rate, hours worked, straight-time and overtime earnings, and gross wages — even if those figures never appear on the stub.", "sources": [ { "id": "nc-stat-95-25-13-deductions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.13", "citation": "N.C. Gen. Stat. § 95-25.13(4).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.13.html", "proposition": "The only pay-stub content the Wage and Hour Act requires an employer to furnish is an itemized statement of deductions made from wages for each pay period in which deductions are taken.", "verbatimQuote": "Furnish each employee with an itemized statement of deductions made from that employee's wages under G.S. 95-25.8 for each pay period such deductions are made.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-13-deductions" }, { "id": "nc-stat-95-25-13-notice", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.13", "citation": "N.C. Gen. Stat. § 95-25.13(3).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.13.html", "proposition": "An employer must notify employees in writing at least one pay period before any change in promised wages, and any reduction must be prospective; wages may be increased retroactively without prior notice.", "verbatimQuote": "Notify employees, in writing, at least one pay period prior to any changes in promised wages. Wages may be retroactively increased without the prior notice required by this subsection.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-13-notice" }, { "id": "nc-reg-13ncac12-0801-records", "authorityType": "regulation", "tier": "primary-source-backed", "title": "13 N.C. Admin. Code 12.0801", "citation": "13 N.C. Admin. Code 12.0801(a).", "url": "http://reports.oah.state.nc.us/ncac/title%2013%20-%20labor/chapter%2012%20-%20wage%20and%20hour/13%20ncac%2012%20.0801.pdf", "proposition": "North Carolina's wage-and-hour recordkeeping rule requires the employer to maintain detailed records for each nonexempt employee — including the regular rate of pay, hours worked, straight-time and overtime earnings, and total gross wages — separate from what the pay stub must display.", "verbatimQuote": "Every employer shall maintain complete and accurate records which contain the following information for each employee in each workweek, unless the employee is specifically exempted: (1) Name in full; (2) Home address, including zip code and phone number; (3) Date of birth if under 20; (4) Occupation in which employed or job title; (5) Time of day and day of week the employee's workweek begins (a group of employees working the same workweek may have one record keeping for the entire group); (6) Regular rate of pay; (7) Hours worked each workday; (8) Total hours worked each workweek; (9) Total straight-time earnings each workweek; (10) Total overtime earnings each workweek; (11) Total additions to or deductions from wages; (12) Total gross wages paid each pay period; (13) Date of each payment.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-reg-13ncac12-0801-records" } ] }, { "slug": "worker-classification", "label": "What test does the state use to classify a worker as an employee or contractor?", "heading": "Employee or independent contractor?", "answerText": "For wage-and-hour purposes, North Carolina uses the FLSA economic-reality test — not the common-law right-of-control test that governs some other areas of state law, and not an ABC test. The Wage and Hour Act defines employ broadly as to suffer or permit to work and employee as any individual employed by an employer, the same suffer-or-permit language the federal statute uses. The North Carolina Department of Labor applies that definition through the federal economic-reality standard, asking whether the worker is, as a matter of economic reality, dependent on the business rather than in business for themselves. The state's misclassification statute — the Employee Fair Classification Act — is an enforcement-and-coordination law only; it expressly does not change the definition of employee under other law, so it does not import an ABC test.", "sources": [ { "id": "nc-stat-95-25-2-definitions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.2", "citation": "N.C. Gen. Stat. § 95-25.2(3).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.2.html", "proposition": "The Wage and Hour Act defines 'employ' as to suffer or permit to work — the FLSA's broad suffer-or-permit formulation — rather than a common-law control definition, and defines 'employee' as any individual employed by an employer.", "verbatimQuote": "“Employ” means to suffer or permit to work.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-2-definitions" }, { "id": "nc-ncdol-economic-reality", "authorityType": "agency-guidance", "tier": "official-source-backed", "title": "N.C. Dep't of Labor, Independent Contractor vs. Employee", "citation": "N.C. Dep't of Labor, Independent Contractor vs. Employee (Wage & Hour fact sheet).", "url": "https://www.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/independent-contractor-vs-employee", "proposition": "The North Carolina Department of Labor tests employee status under the FLSA and Wage and Hour Act by economic reality — whether the worker is economically dependent on the business — and not by the common-law master-and-servant standard.", "verbatimQuote": "The employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” It is not determined by the common law standards relating to master and servant.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-ncdol-economic-reality" }, { "id": "nc-stat-143-786-efca", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 143-786", "citation": "N.C. Gen. Stat. § 143-786(b).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_143/GS_143-786.html", "proposition": "The Employee Fair Classification Act is an enforcement-and-coordination statute that expressly does not change the definition of employer or employee under other law, so it does not adopt an ABC test or displace the wage-and-hour economic-reality analysis.", "verbatimQuote": "Nothing in this Article shall be construed or is intended to change the definition of “employer” or “employee” under any other provision of law.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-143-786-efca" }, { "id": "nc-stat-95-25-24a-franchisee", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.24A", "citation": "N.C. Gen. Stat. § 95-25.24A.", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.24A.html", "proposition": "Under a statutory carve-out, a franchisee and a franchisee's employees are not deemed employees of the franchisor for Wage and Hour Act purposes.", "verbatimQuote": "Neither a franchisee nor a franchisee's employee shall be deemed to be an employee of the franchisor for any purposes, including, but not limited to, this Article and Chapters 96, 97, and 105 of the General Statutes.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-24a-franchisee" } ] }, { "slug": "tip-credit", "label": "Does the state allow a tip credit against the cash minimum wage?", "heading": "Is a tip credit allowed?", "answerText": "Yes — North Carolina allows the full federal tip credit, and layers one state-specific limit on top. An employer may count a tipped employee's tips as wages up to the amount permitted under FLSA section 3(m), provided the employee is told in advance, keeps all tips, and the employer maintains accurate tip records. Because the credit tracks federal law, the tipped cash wage can be as low as $2.13 an hour so long as tips bring the worker to at least $7.25. Tip pooling is allowed among employees who customarily and regularly receive tips, but North Carolina caps how much any one worker can be required to contribute: no employee's tips may be reduced by more than 15% under a pool. The Administrative Code puts the same rule as a floor — a pooling employee must keep at least 85% of their own tips, or their share of the pool, whichever is greater.", "sources": [ { "id": "nc-stat-95-25-3-tipcredit", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.3", "citation": "N.C. Gen. Stat. § 95-25.3(f).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.3.html", "proposition": "North Carolina lets an employer count tips as wages up to the amount permitted under FLSA section 3(m) if the employee is notified in advance, retains all tips, and the employer keeps accurate tip records — so the tipped cash wage can be as low as the federal $2.13 when tips make up the difference to $7.25.", "verbatimQuote": "Tips earned by a tipped employee may be counted as wages only up to the amount permitted in section 3(m) of the Fair Labor Standards Act, 29 U.S.C. 203(m), if the tipped employee is notified in advance, is permitted to retain all tips and the employer maintains accurate and complete records of tips received by each employee as such tips are certified by the employee monthly or for each pay period.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-3-tipcredit" }, { "id": "nc-stat-95-25-3-tippool", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.3", "citation": "N.C. Gen. Stat. § 95-25.3(f).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.3.html", "proposition": "Tip pooling is permitted only among employees who customarily and regularly receive tips, and no employee's tips may be reduced by more than 15% under a tip-pooling arrangement.", "verbatimQuote": "Tip pooling shall also be permissible among employees who customarily and regularly receive tips; however, no employee's tips may be reduced by more than fifteen percent (15%) under a tip pooling arrangement.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-3-tippool" }, { "id": "nc-reg-13ncac12-0303-retention", "authorityType": "regulation", "tier": "primary-source-backed", "title": "13 N.C. Admin. Code 12.0303", "citation": "13 N.C. Admin. Code 12.0303(h).", "url": "http://reports.oah.state.nc.us/ncac/title%2013%20-%20labor/chapter%2012%20-%20wage%20and%20hour/13%20ncac%2012%20.0303.pdf", "proposition": "North Carolina's tip rule treats the 15% pool-contribution cap as a retention floor: a tip-pooling employee must receive at least 85% of their actual tips before pooling, or their share from the pool, whichever is greater.", "verbatimQuote": "The requirement of 95-25.6 that the employer pay “tips accruing to the employee” shall be satisfied if the employee in a tip pooling arrangement receives 85% of the employee's actual tips before pooling or the employee's share received from the pool, whichever is greater.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-reg-13ncac12-0303-retention" } ] }, { "slug": "enforcement", "label": "How is wage-and-hour law enforced, and can employees sue?", "heading": "How is it enforced?", "answerText": "Both the state and private plaintiffs enforce the Wage and Hour Act. The Commissioner of Labor administers and enforces the Act, with power to hold hearings and bring civil and criminal proceedings. Employees also have their own private right of action: an employee — or several together — may sue in the General Court of Justice to recover unpaid wages without first exhausting any administrative process. A prevailing employee recovers the unpaid wages, interest, and the presumptive liquidated-damages doubling (which an employer avoids only by proving good faith), and the court may in its discretion award costs and reasonable attorneys' fees — the combination that makes even modest wage claims worth bringing.", "sources": [ { "id": "nc-stat-95-25-16-commissioner", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.16", "citation": "N.C. Gen. Stat. § 95-25.16(a).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.16.html", "proposition": "The Commissioner of Labor enforces and administers the Wage and Hour Act and may hold hearings and institute civil and criminal proceedings.", "verbatimQuote": "The Commissioner shall enforce and administer the provisions of this Article, and the Commissioner or his authorized representative is empowered to hold hearings and to institute criminal and civil proceedings hereunder.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-16-commissioner" }, { "id": "nc-stat-95-25-22-private", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.22", "citation": "N.C. Gen. Stat. § 95-25.22(b).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.22.html", "proposition": "The Wage and Hour Act gives employees a private right of action: one or more employees may sue in the General Court of Justice to recover unpaid wages.", "verbatimQuote": "Action to recover such liability may be maintained in the General Court of Justice by any one or more employees.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-22-private" }, { "id": "nc-stat-95-25-22-fees", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "N.C. Gen. Stat. § 95-25.22", "citation": "N.C. Gen. Stat. § 95-25.22(d).", "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_95/GS_95-25.22.html", "proposition": "In a Wage and Hour Act action the court may, in its discretion, order the defendant to pay the costs and fees of the action and reasonable attorneys' fees on top of any judgment — a discretionary award, not an automatic one.", "verbatimQuote": "The court, in any action brought under this Article may, in addition to any judgment awarded plaintiff, order costs and fees of the action and reasonable attorneys' fees to be paid by the defendant.", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/north-carolina#src-nc-stat-95-25-22-fees" } ] } ] } }