North Carolina Salaried Employees Laws

April 25th 2024

In North Carolina, labor laws play a crucial role in shaping the relationship between employers and employees. Like other US states, North Carolina has established laws that outline the rights of salaried employees. Salaried employees receive predetermined fixed compensation regularly, either weekly or less frequently.

This article provides a comprehensive overview of the employment regulations in North Carolina, providing information on key aspects of wage payment procedures.

This article covers:

Payment of Wages for Salaried Employees in North Carolina

In North Carolina, employers are required to follow the federal wage regulations. This means that the state minimum wage should align with the federal minimum wage of $7.25 per hour.

Employers must ensure that all tipped employees in North Carolina earn at least the minimum wage in cash wages or tips. They must pay workers at least $2.13 an hour, provided that the tips received make up for the difference between the wage paid and the minimum wage. If not, employers need to increase their hourly wage payment to meet this requirement.

According to the Fair Labor Standards Act (FLSA), wages for young people (under the age of 20) are at least $4.25 per hour for the initial 90 days of work. After this period, or when the employee turns 20, their minimum wage is adjusted to $7.25. In addition, full-time students may receive 85% of the federal minimum wage under certain circumstances.

Pay Frequency for Salaried Employees in North Carolina

Employers in North Carolina have the flexibility to choose from five payroll frequencies:

  • Daily
  • Weekly
  • Biweekly
  • Semi-monthly
  • Monthly

Meanwhile, employees with bonus or commission-based pay may receive paychecks as infrequently as once a year.

Salaried Employees’ Eligibility for Overtime in North Carolina

In North Carolina, salaried employees earning less than $684 weekly are eligible for overtime pay and are classified as non-exempt. Employers need to compensate them 1.5 times for any hours worked beyond 40 in a workweek.

In order to ensure that all employees are justly compensated for their overtime, employers need to monitor work hours closely or employ automated systems to track time and attendance.

Employers who disregard overtime compensation may face penalties for violations.

Overtime Pay for North Carolina Salaried Employees

Employees who exceed more than 40 hours in a workweek should receive overtime pay, which in North Carolina amounts to 1.5 times the regular hourly rate. Employees asked to work on a paid holiday will also be compensated for overtime hours if the 40-hour threshold for the week is exceeded.

At times, overtime pay computations might appear complex, but employers can simplify and streamline the process by using tools such as a timesheet app, monitoring time and attendance software, or overtime compliance software.

Exceptions to Overtime Exemptions for North Carolina Salaried Employees

While the primary criteria for specific employees to be categorized as exempt from overtime is their salary grade (earning more than $684 per week), there are additional criteria, according to the Code of Federal Regulations (541). These include:

  • Bona fide executive, administrative, and professional employees
  • Creative professionals
  • Computer employees earning a specified amount per week
  • Highly compensated employees
  • Outside sales employees

Violation of Salaried Employees Wages Payment in North Carolina

The federal and state laws expect all employers to comply with the wages payment requirements for salaried employees. Some of the violations that employers might commit include:

  • Paying below the minimum wage
  • Excessive paycheck deductions
  • Neglecting overtime pay
  • Underpayment for commission-based work
  • Incorrect classification of employees (classifying non-exempt employees as exempt)
  • Non compliant time clock rounding
  • Failing to pay employees on regular paydays

Employees have the right to file a lawsuit in the event of any of these violations occurring. Complaints can be filed with the North Carolina Department of Labor.

Male and Female Salaried Employees in North Carolina

The North Carolina Equal Pay Act prohibits gender-based discrimination in salary or wages, including benefits. This act ensures that employees are not paid lower rates than those of a different gender with comparable work, and only allows for variations in salary based on the employee’s seniority and merit. Employers found to have violated this statute may face penalties.

Leave Entitlements for Salaried Employees in North Carolina

In North Carolina, employers are required to grant various types of leave to their employees. These include holiday leave, sick leave, vacation leave, Family and Medical Leave (FMLA), family illness leave, paid parental leave, voluntary shared leave, community service leave, military leave, civil leave, and leave for organ and blood donation.

Public employers are required by law to offer holiday leave on certain holidays. Meanwhile, vacation leave is granted based on how long a state employee has worked in a government or public agency.

Sick leave allows eligible employees to accrue up to 96 hours annually, with part-time employees receiving the leave on a prorated basis. FMLA provides up to 12 weeks of unpaid, job-protected leave, while family illness leave extends up to 52 weeks for caregiving after FMLA benefits have been exhausted. Paid parental leave offers new parents 4 to 8 weeks of paid time off at 100% of the regular salary.

Meanwhile, voluntary shared leave, community service leave, military leave, civil leave, and leave for organ, bone marrow, and blood donation offers employees time off with varying levels of compensation and job protection according to circumstances.

American Red Cross disaster service volunteers are eligible for up to 15 paid workdays off within a 12-month period.

Learn more about North Carolina Leave Laws.

Break Entitlements for Salaried Employees in North Carolina

Employers are not obligated to provide rest or meal breaks for employees aged 16 years or older. If an employer does provide breaks, specific policies should be in a written agreement.

Under the federal law, if an employer provides rest breaks, breaks lasting 20 minutes or less are compensable. However, rest or meal breaks that extend beyond 30 minutes do not have to be considered as payable time by the employer.

As for breastfeeding breaks, state regulations do not clearly address this type of break. However, under federal law, employees have the right to take breaks to express their breast milk. This entitlement break is only up to a year after giving birth.

Deductions from Exempt Employees’ Salaries in North Carolina

According to the Bureau of Labor and Industries, payroll deductions are permissible, provided that they bring benefit to the employees. Employers should clearly outline any withholdings on the paycheck, and cannot withhold or deduct any portion of the wages unless:

  • It is required by law (e.g., taxes along with any related fees).
  • It offers individual benefit (e.g., health insurance premiums).
  • There is written authorization for other deductions, ensuring the employer is not the sole recipient (e.g., charity contributions).
  • Signed loan agreement by the employee.

Termination of Employment for Salaried Employees in North Carolina

North Carolina follows an “at-will” employment agreement. Employers can terminate employees at any time for any reason, given that the termination is not grounded in discrimination or retaliation. Meanwhile, employees can resign at any time without legal repercussions.

Learn more about North Carolina Labor Laws through our detailed guide.

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.