Compliance Watch:
What are my rights as an hourly employee in North Carolina?

April 11th 2024

As an hourly employee in North Carolina, it is fundamental to remember that knowing your employment rights transcends beyond mere legal applicability; it is an important aspect in your professional development that will help you confidently navigate your career journey in the long run.

As you clock in and out everyday, the income that you earn significantly shapes your position in the workforce. Furthermore, the intricacies of employment requirements may differ from state to state across the US. This may have you wondering about what your particular employment rights may be in the state of North Carolina and how you can ensure that those rights are met.

Hence, this article is written particularly for you to address any of the questions which you may already have and more importantly, empower you with the knowledge needed to sculpt your work experience in a way that is enlightening and in accordance to the rules of your state’s particular requirements.

This Article Covers

Defining an Hourly Employee in North Carolina
Wage and Hour Regulations in North Carolina
Rest Laws in North Carolina
Deductions, Benefits, and Protections in North Carolina
Termination of Employment in North Carolina

Defining an Hourly Employee in North Carolina

What is Hourly Employment in North Carolina?

Unlike salaried workers who receive a fixed pay regardless of the actual hours they work, hourly employees are workers who are compensated for every hour they work in a given work week.

Employers decide how many hours their hourly employees must work in a week. Hourly employees typically have employment contracts that differ from their salaried counterparts and depend on tools such as timecards or timesheets to keep track of their actual working hours so that they are compensated accordingly.

Since hourly employees are compensated by the hour, this means they are paid according to the exact hours they work which may cause a fluctuation in their income from one week to the next depending on the hours they work which contrasts with salaried employees who receive a consistent income.

What are the Key Differences Between Salaried and Hourly Employees in North Carolina?

Aspect Hourly Employees Salaried Employees
Compensation Compensated for every actual hour that has been worked. Employers pay a fixed compensation  regardless of the actual hours worked.
Minimum wage Legally entitled to receive the state’s minimum hourly wage. May be ineligible to earn the state’s minimum hourly wage if the employee is classed as non-exempt.
Overtime Pay Eligible for overtime pay for working hours beyond 40 hours in a workweek (fixed at a rate of 1.5 times the regular hourly pay). Only entitled for overtime compensation if the salaried employee is categorized as non-exempt.
Job security Less job security as income may fluctuate in the week based on the hours worked. More job security as  income is fixed and consistent.
Rest and Meal Breaks No legal entitlement to rest and meal breaks. No legal entitlement to rest and meal breaks.
Compensation Stability Inconsistent income as compensation relies on the actual hours worked. A consistent weekly compensation is received.

To learn more about North Carolina labor laws, you can access our informative guides on understanding your rights as a salaried employee in North Carolina and discovering how to run payroll in North Carolina

Wage and Hour Regulations in North Carolina

What are the Maximum Weekly Working Hours in North Carolina?

While both the federal law and North Carolina laws do not restrict the number of hours an employee older than 18 years of age can work in a given week, The federal Fair Labor Standards Act (FLSA) does specify that employees who work any hours exceeding 40 hours in a workweek are entitled to receive overtime payment that is compensated at a rate of 1.5 times their regular hourly minimum wage. However, it should be noted that overtime compensation is exempted for employees of certain employment categories and salary thresholds.

What is the Minimum Wage for Hourly Employees in North Carolina?

The NCWHA mandates that the minimum wage requirement in North Carolina is $7.25 per hour, mirroring the federal minimum hourly wage of $7.25 as established by the Fair Labor Standards Act (FLSA). Hence, an hourly employee in North Carolina is expected to earn $290 in a 40-hour work week at the state’s minimum wage rate.

Do All Employees Earn the Minimum Wage in North Carolina?

Both state and federal laws exempt certain categories of employees from earning the state’s minimum hourly wage. These particular exempt categories of employees are as follows:

  • Employees under the age of 20: These employees cannot earn less than an hourly wage rate of $4.25 in the first 90 days of employment.
  • Full-time students: The FLSA defines that Full-time students, learners, apprentices and messengers may earn 85% of the hourly minimum wage.
  • Tipped employees: Tipped employees earn a minimum hourly pay of $2.13. However, employers must ensure that hourly wage combined with the tips earned meets the federal minimum hourly wage requirement of $7.25.
  • Domestic workers, such as babysitters.
  • Models, actors and performers.
  • Agricultural workers.
  • Outside salespeople.
  • Salaried employees categorized as administrative, executive, or professional employees will be exempt if their weekly earnings exceed $684.

How Many Hours Qualify As Overtime and What is the Associated Pay in North Carolina?

As mentioned earlier, all hours that are worked beyond 40 hours in a workweek by an employee is considered as overtime whereby employees must be paid 1.5 times their regular hourly rate of pay for each additional hour worked. Therefore, the minimum hourly wage for North Carolina employees working overtime is $10.88. However, workweek hours vary for employees of seasonal amusement or recreational establishments. According to North Carolina labor law, established under section 95-25.4 of the ‘North Carolina General Statutes Annotated,’ overtime payment is only earned for each hour worked beyond 45 hours in a workweek.

It is worth noting that the FLSA exempts certain categories of employees from receiving overtime payment under the overtime requirement principle. Hence, the employees of particular occupations in North Carolina that are exempt from overtime laws include:

  • Public office holders
  • Administrative, professional, or executive employees who earn a minimum of $684 in a week 
  • Transportation workers
  • Agricultural workers
  • External salespersons
  • Computer employees

Rest Laws in North Carolina

What are the Offered Meal and Rest Breaks for Hourly Employees in North Carolina?

In North Carolina, employers are not mandated by federal law or their own North Carolina Wage and Hour Act state law to provide rest or meal breaks for both salaried and hourly employees. Instead, both of these breaks are offered at the employer’s discretion. The exception applies for minor employees below the age of 16, who must be given at least a 30-minute break after 5 hours of work. However, employers who choose to offer meal breaks to their employees must bear in mind that breaks lasting 20 minutes or less are compensable under the federal Fair Labor Standards Act (FLSA).

As for nursing mothers, the applicable governing law that regulates breastfeeding breaks for these employees is the federal Fair Labor Standards Act (FLSA). This legislation offers reasonable breaks for lactating mothers to express milk in a private non-restroom area that is free from public intrusion for the first year after childbirth.


What Laws Govern Time Off and Leaves for Hourly Employees in North Carolina?

Many employers in the US provide employees with the opportunity to take time off from work to support them in attending to particular matters of their own for reasons typically relating to taking care of their own health, those of family members, pregnancy, or child rearing. These leave privileges, which can range from being fully compensated to partly compensated or not compensated at all, are typically established in an agreement between the employer and employee.

  • The Family and Medical Leave Act: This federal law entitles employees to take 12 weeks of unpaid leave to recover from a serious health condition (that prevents them from working) or to look after a family member with a medical condition, while having their employment position remain secured. Employees are eligible for this leave if they have been hired by the same employer for a minimum of 12 months before using their leave and have worked for a minimum of 1,250 hours in those 12 months.
  • Uniformed Services Employment and Reemployment Rights Act (USERRA): The federal Act provides employees up to 5 years of unpaid leave for military service while having their employment status protected. This legislation is applicable to all employers, regardless of their size or type.

Deductions, Benefits, and Protections in North Carolina

What are the Laws Regarding Pay Deductions for Hourly Employees in North Carolina?

The state laws provided under the North Carolina General Statutes and the federal Fair Labor Standards Act (FLSA) are the governing legal frameworks that regulate wage deductions for all employees in North Carolina. Federal regulations mandate employers to ensure that such deductions do not reduce the wage amount below the federal minimum wage of $7.25 per hour, whether for overtime or non-overtime work weeks.

According to section 95-25.8 of North Carolina’s Statutes, an employer is only permitted to withhold or deduct any portion of an employee’s wages if:

  1. The state or federal laws empowers the employer to do so (such as income taxes, FICA and court ordered garnishments.)
  2. Prior written consent has been sought from the employee which must:  
    • Be signed either before or on the paydays in which the deductions shall be made.
    • State the actual amount of wages to be deducted in dollars or percentage.
    • Specify the cause for the deduction.

Additionally, an employee has the right to:

  • Receive prior written notice pertaining to the value that will be deducted and the employee’s right to cancel authorization; and
  • Be granted a reasonable opportunity to revoke their authorization in writing. 

Employers in North Carolina must be aware that withholding or deducting a portion of an employee’s wages for any of the following below can only take place after giving the employee prior written notice, and the deductions can occur 7 days after this notice (which is not needed when the separation of employment takes place):

  • cash shortages,
  • inventory shortages, or
  • loss or damage to property

Hence, it is crucial for employers to keep track of every deducted wage to remain compliant with the applicable federal and state laws.

What are the Provided Hourly Employees Entitlements Under North Carolina State Law?

Hourly employees in North Carolina enjoy a variety of employment rights that they are entitled to. These employment entitlements include:

  • Minimum Wage: Employees are entitled to earn the minimum hourly wage of $7.25 under state requirements. 
  • Overtime: All hourly wage employees in North Carolina acquire the right to earn overtime compensation for working hours that surpass 40 hours in a given workweek fixed at a rate set at one and a half times their regular hourly wage as enforced by the North Carolina Wage and Hour Act (NCWHA).
  • Private Right of Action: Under section 95-25.22(a)&(b) of the North Carolina General Statutes Annotation, the NCWHA entitles employees to file a claim for outstanding wages from an employer’s legal violation of minimum wage, payment provisions and overtime requirements.
  • Right to promised Wages: Under state law, Hourly employees are entitled to have their promised wages to be paid to them according to the employment policy that has been established by the employer. As per the North Carolina General Statutes Annotation, these promised wages may include sick pay, severance pay, bonuses, commissions and other promised amounts.
  • Child Labour protections: The NCWHA provides employment protections for minors below the age of 18.The respective provisions, in addition to other requirements, demand all North Carolina employers to ensure minors:
    • Have a youth employment certificate (prior to commencing employment).
    • Are prevented from working in dangerous occupations.
    • Are restricted in the number of hours that they work.

What are the Provided Hourly Employee Protections Under North Carolina State Law?

  1. Violations Reporting: Whistleblowing is the reporting of unethical and illegal practices in the workplace. North Carolina protects employees from employment retaliation (such as dismissal) when they engage in whistleblowing practices. The North Carolina False Claims Act is an exemplary law which governs the rights of employees who have faced retaliation by employers from whistleblowing.
  2. Workplace safety: North Carolina employers must ensure they meet the standards pertaining to workplace safety and health provided under both federal Occupational Safety and Health Act and North Carolina Occupational Safety and Health Act. These laws not only aim to protect the welfare and safety of employees during their employment but also ensure that the employees are made aware of their employment safety rights.
  3. Termination of employment: Employees are legally entitled to receive their final paychecks upon the termination of their employment.
  4. Employment protection of minors: North Carolina based employers must secure the safety and wellbeing of minors in employment by regulating their working hours and prevent them from working in certain occupations in compliance with state and federal regulations.
  5. Discrimination and Harassment: Employment protection of employees in North Carolina is provided under North Carolina Equal Employment Practices Act (NCEEPA). Hence, employers cannot base their employment decisions for reasons relating to an employees protected characteristics which include:
    • Race
    • Color
    • Religion
    • National origin
    • Sex
    • Age
    • Disability

Termination of Employment in North Carolina

What are the Termination Laws for Hourly Employees in North Carolina?

North Carolina is an ‘employment-at-will’ state which, in essence, enables employers and employees alike to freely terminate their employment without having to provide any justifications for doing so. However, particular exceptions fundamentally apply to the applicability of this general doctrine, which legally restricts an employer’s rights from terminating their worker’s employment under certain conditions. The exceptions are as follows:

  1. Contractual agreement- A written contract may stipulate the particular circumstances at which termination of employment may occur. An employer that breaches these contractual terms will face legal ramifications for such violations.
  2. Public policy exception: North Carolina employers cannot terminate their employees on the basis that they have refused to adhere to a request to participate in an illegal activity or decided to file a claim for compensation.
  3. Retaliation: North Carolina and federal labor laws protect employees from being terminated or retaliated against for asserting their legal rights or attending discrimination hearings. Hence, an employee cannot be terminated or face retaliation (by having their pay cut or being relocated) for being a victim of domestic abuse or filing a legal claim for equal pay.
  4. Workplace discrimination: Federal and state laws prohibit an employer from engaging in wrongful termination by terminating an employee for their protected characteristics which include:  
    • Race
    • Color
    • Sex
    • National origin
    • Pregnancy
    • Religion
    • Age
    • Disability
    • Genetic information

Additionally, state laws provided under section 95-25.7 of North Carolina General Statutes Annotation requires an employer to pay employees their final paycheck on or before the upcoming pay period. Compensation determined by bonuses, commissions or other methods of calculation must be made on the first payday and shall not be forfeited unless the employee had received prior notice of the forfeiture.

Should Severance Pay Be Provided to Hourly Employees in North Carolina?

Severance payment is the compensation benefits that are mutually agreed to be extended by an employer to an employee upon the termination of their employment that is outlined in a contract. Severance payments can be paid as a lump sum or in a few instalments.

In North Carolina, there are no state or federal laws that mandates an employer to provide severance payments to employees upon their termination. Hence, severance payments are voluntarily offered at the discretion of the employer. If severance payments are granted, employers must oblige to the respective terms of the employment contract in this regard.

Final Thoughts

In summary, as an hourly employee in North Carolina, having a robust comprehension about your employment rights is crucial as an awareness of your entitlements can help prevent you from being exploited and mistreated in the workforce.

Due to the dynamic nature of employment regulations, keeping up to date with its latest developments can help you make well informed decisions in your professional career and ensure that your employment entitlements remain secure.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.