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Filing a Wage and Hour Claim – North Carolina

Does North Carolina have state overtime laws that are different from federal law?

Like federal law, North Carolina state law requires that an employer pay an employee time and a half (based on the employee’s regular rate of pay) for any hours worked over 40 in a given work week. In addition, however, employers of seasonal amusement of recreational establishments are only required to pay overtime for hours worked over 45 in any given workweek.

Anyone who is not covered by the state’s minimum wage requirements is not covered by the overtime requirements either. This includes anyone covered by federal labor laws (i.e. anyone engaged in interstate commerce), which includes the majority of workers in the state, as well as the other exceptions outlined below (see #2). In addition, the following individuals covered by North Carolina’s minimum wage law are not covered by its overtime provisions:

  • Drivers, drivers’ helpers, loaders and mechanics (as defined under federal law).
  • Taxi drivers.
  • Seamen (as defined under federal law).
  • Railroad and air carrier employees (as defined under federal law).
  • Salespersons, mechanics, and parts people employed by automotive, truck, and farm implement dealers (as defined under federal law).
  • Salespersons employed by trailer, boat, and aircraft dealers (as defined under federal law).
  • Live in child-care workers or other live in employees in homes for dependent children.
  • Radio and television announcers, news editors, and chief engineers (as defined under federal law, only applies in small towns and cities).

Does North Carolina have a minimum wage that is different from federal law?

The minimum wage in North Carolina is $7.25, which is the same as the federal minimum wage.

The coverage of the minimum wage law differs considerably from the coverage of the federal provision. First, and most important, any employer who is covered under the federal minimum wage requirements is generally not covered under North Carolina law. That means that North Carolina’s minimum wage does not apply to the vast majority of employees (e.g. those engaged in interstate commerce) in the state. There is one important exception to this: an employer employing someone under the age of 18 in North Carolina must obtain a youth certificate. Also, any individual for whom federal law provides a minimum wage of less than $7.25 (or whatever the federal minimum wage is) is covered by North Carolina’s law; that is, such individuals under state law are entitled to the general minimum wage.

Even some individuals who are not covered under federal law are still not covered under state law. These include the following:

  • Agricultural workers (as defined under federal law).
  • Babysitters and companions (as defined under federal law).
  • Anyone employed as a page in the state General Assembly or Governor’s Office.
  • Volunteers in medical, educational, religious, or nonprofit organizations.
  • Persons confined in and working for any penal, correctional, or mental institution run by the State or local government.
  • Models, actors, and performers (as defined under federal law, essentially applying to children).
  • Anyone working in an outdoor drama in a production role (not office workers, ticket takers, ushers, and parking attendants).
  • Summer camp employees or employees of seasonal religious or nonprofit educational conference centers.
  • People involved in the catching, processing, or first sale of seafood (as defined under federal law).
  • Immediate family members and other dependents of their employers.
  • Anyone employed in an executive, administrative, professional, or outside sales capacity (as defined under federal law).
  • Any person while he or she is participating in a ride-sharing program.
  • Computer workers (as defined under federal law).

Some employees have a different minimum wage that is set as a percentage of the current minimum:

  • The minimum wage for students, learners, apprentices, and messengers may be 90% of the current minimum wage, rounded to the lowest nickel ($4.60 per hour).
  • Disabled individuals whose earning capacity is impaired may earn less than the minimum wage, depending on the nature of their disability. An employer must file an application with the Labor Commissioner in order to pay a disabled person less than the minimum wage.
  • The Labor Commissioner is empowered to establish a minimum wage of 85% of the federal minimum wage for workers who are “economically disadvantaged,” that is, workers who have been unemployed for 15 weeks, are receiving Work First Family Assistance benefits, or who are receiving supplemental social security benefits. However, the Commission has not for the time being established such a minimum wage.
  • The Labor Commission is also empowered to establish a minimum wage of 85% of the federal minimum for seasonal amusement, recreational, or food service employees. For the time being the Commissioner has not done so.

Tipped employees are treated as they are under federal law. That is, tipped employees may be paid as little as $2.13 per hour in cash wages, as long as their total wages (including tips) equals the minimum wage.

Employers may deduct from wages (and count against the minimum wage) the reasonable cost of board, lodging, or other facilities under North Carolina law. “Other facilities” must be in the nature of board and lodging (e.g. meals, furnished housing, fuel, clothing, transportation). The employer can only count those costs against the employee’s wages if the benefit is to the employee and the employee has already received it. Other items that are primarily for the benefit of the employer (e.g. the cost of tools, customized uniforms, transportation that is a necessary part of employment) may not be the basis for deductions.

Does North Carolina have meal and rest break requirements, unlike federal law?

Like federal law, North Carolina does not require rest or meal breaks for its employees. There is one exception: a 30-minute break is required after five hours for employees who are 14 or 15 years old.

Does North Carolina have other labor standards that are different from federal law?

Under North Carolina law, an employer may only deduct from an employee’s wages if this is required by law (e.g. taxes), or if the employee and employer agree in writing either to a specific deduction or to a blanket deduction for unspecified amounts. For blanket deductions, the employee must be informed in advance of the specific deductions before they happen. While employers, following these rules, may reduce pay for regular work hours to the minimum wage level, (s)he cannot reduce the pay of overtime hours. In addition, an employer may deduct for cash shortages, inventory shortages, or similar loss or damage the employee has caused, but the employer must get the employee’s written approval for such deductions and must provide notice seven days before making the deduction (the notice is not applicable in case of termination). If the employee has been arrested in relation to the shortage, loss, or damage, the employee can deduct without fulfilling those requirements.

How do I file a wage/hour or labor standards claim in North Carolina?

You can file a complaint with the North Carolina Department of Labor. You can do so by calling the Department’s Raleigh office at 919.807.2796, or by calling toll-free (NC only) 1-800-NC-LABOR (1-800-625-2267). The Department can hold hearings regarding your wage claim, will attempt to resolve the issue, and can file a suit in court on your behalf. If your claim involves your last paycheck, you must wait at least 10 days before contacting the Department. If you have already brought an action in court to recover wages you are owed (see #7 below), the Department cannot help you. If the Department does bring a case on your behalf, you will receive the wages you are owed plus interest on those wages. You will receive twice unless your employer can prove that (s)he acted in good faith and did not believe (s)he had violated state law.

What are my time deadlines?

Do not delay in contacting the North Carolina Department of Labor to file a claim. There are strict time limits in which charges of wage-and-hour violations must be filed. As there is a 2-year statute of limitations on all wage claims cases with the state of North Carolina, if you wait more than two years after you are owed wages, the Department cannot do anything for you. However, as you might have other legal claims with shorter deadlines, do not wait to file your claim until your time limit is close to expiring. You may wish to consult with an attorney prior to filing your claim, if possible. Yet if you are unable to find an attorney who will assist you, it is not necessary to have an attorney to file your claim with the North Carolina Department of Labor.

How can I or my attorney pursue a claim in court in North Carolina?

If you choose, you can bring a suit in the General Court of Justice without filing a claim with the North Carolina Department of Labor. If you do so, there is a two-year statute of limitations. If you are successful, you are entitled to twice the amount you are owed (plus interest), unless your employer can prove (s)he acted in good faith, in which case you are only entitled to what you are owed, plus interest. The court may also require your employer to pay your litigation costs and attorneys’ fees, although if you bring a frivolous action, you will be required to pay your employer’s litigation costs and attorney’s fees.

Contact Information

The North Carolina Department of Labor website can be found at http://www.nclabor.com.

The main contact information for the state Department of Labor follows:

N.C. Department of Labor
1101 Mail Service Center
Raleigh, NC 27699-1101
(919) 807-2796 or 1-800-NC-LABOR

The Wage and Hour Administrator, Jim Taylor, can be reached at (919) 807-2801 or [email protected].

This material was originally prepared by attorney Joseph Jaramillo and former law clerks Keia Cole and Adam Weiss of the law firm Goldstein, Demchak Baller Borgen and Dardarian, and was updated by Professor Douglas D. Scherer, of Touro College, Jacob D. Fuchsberg Law Center. Professor Scherer also serves as the Vice President of Workplace Fairness.