It’s important to stay up to date on all of the employment laws in your state so that you can maintain compliance in your business. We did some of the hard work for you and put some of the most important North Carolina statutes in one place so you can either learn them for the first time or give yourself a refresher. 

However, remember that our summary is not qualified legal advice, laws are always subject to change, and they can vary from municipality to municipality. 

It’s up to you to make sure you’re compliant with all laws and statutes in your area. Consult with a qualified lawyer and/or your local government agencies if you have questions or concerns. 

Here are a few North Carolina labor laws every small business owner should know.

Resources

First, here are a few helpful links and resources for you to bookmark and refer back to:

Leave

  • Sick Days: Employers are not obligated to provide paid or unpaid sick leave to employees under North Carolina law, but federal law might require them to provide unpaid sick leave under the Family and Medical Leave Act.  
  • Medical Leave: No statute, but employers might be required to provide unpaid leave under the FMLA. 
  • Vacation Leave: North Carolina law does not require employers to provide paid or unpaid vacation leave
    • If an employer establishes a vacation policy, it must lay out the following:
      • How vacation is earned 
      • If vacation days carry over to the next year, and if so, how much
      • If vacation time is mandatory
      • If an employee can receive compensation instead of time off
      • How vacation pay may be forfeited if an employee is terminated
    • An employer must abide by whatever policy they have established. 
  • Jury Duty: Employers are not required to pay employees for time taken to respond to a jury summons, but employees cannot be penalized or terminated for doing so. 
  • Witness Leave: Employers are not required to provide employees with leave to appear as a witness, but discharging an employee for taking leave to appear as a witness may constitute a wrongful discharge in violation of public policy.
  • Holiday Leave: Private employers are not required to provide paid or unpaid holiday leave, but if they choose to do so, they must adhere to their established employment contract. 
  • Voting Leave: Employers are not required to provide paid or unpaid voting leave. 
  • Bereavement Leave: Employers are not required to provide paid or unpaid bereavement leave. 
  • Domestic Violence or Sexual Assault Leave: Employers must provide leave to an employee who is a victim of domestic violence and requires time off from work to obtain or attempt to obtain relief. The employer may decide whether the leave is paid or unpaid.
    • Employers can require advance notice, except in emergencies, and can require documentation of an emergency afterward.
  • Emergency Response Leave: Employers must allow their employees to take leave to volunteer as firefighters, rescue squad workers, or emergency medical service personnel during a state of emergency. Employees may but cannot be required to use available paid leave.
  • School Volunteer Leave: Employers must provide their employees with up to four hours of leave per year to attend or be involved in their child’s school or daycare. Employees who are the parent, guardian, or person standing in loco parentis are eligible for the leave.
  • Military Leave: Employees who were away on active duty and then honorably released must be restored to their previous position, or a like position, whenever reasonable, if they request reemployment within the prescribed time frames.
    • To qualify for reinstatement, employees must make a written request to return to work within five days of return if they were gone for 30 or fewer days, and within 14 days of return if they were gone more than 30 days.
    • That time frame will be extended by up to two years if the employee is recovering from a service-related injury.

Final Paycheck

  • An employer must pay an employee their final paycheck after being separated from employment (no matter the conditions of the separation) by the next regular payday. 
  • If an employee requests the final paycheck be mailed, the employer must comply. 

Minimum Wage

  • The current minimum wage in North Carolina is $7.25.
  • The North Carolina Wage and Hour Act exempts many employees covered by the Fair Labor Standards Act, such as those who work in the commerce or production of goods for commerce, from their minimum wage, overtime, youth employment, and recordkeeping requirements. 
  • The North Carolina minimum wage is required to be the same amount as federal minimum wage if it is higher than what is set forth in the Wage and Hour Act

Tipped Wages

  • The minimum wage for tipped employees in North Carolina is $2.13. 
  • Employers may pay the lower minimum wage if: 
    • The employee typically makes more than $20 per month in tips. 
    • The employee is notified that they will be paid the lower minimum wage. 
    • The employee is allowed to keep all tips. 
    • The employer keeps an accurate and thorough record of all tips made each pay period. 
  • Employers are allowed to require tipped employees to participate in a tip pooling arrangement

Pay Practices

  • Employers may pay their employees daily, weekly, biweekly, semimonthly, or monthly on regular paydays. Commissions may be paid annually if specified in advance.
  • Employers must provide at least 24 hours’ notice of a change in wages, either by posting a notice in a prominent location (for changes that affect all employees) or otherwise informing employees in writing.
  • Employers may choose the timing of paying their employees.
  • New employees must be given notice of the following:
    • The day wages are paid
    • Their rate of pay
    • All policies and practices regarding promised wages

Child Labor

  • Minors 14 and 15 years of age may work:
    • No more than 3 hours a day when school is in session and 8 hours a day when school is out.
    • Only between the hours of 7 a.m. and 7 p.m. when school is in session and 7 a.m. to 9 p.m. when school is not in session.
    • A maximum of 18 hours per week when school is in session and 40 hours per week when school is not in session. 
    • Only outside of school hours. 
  • Employers are required to give minors 14 and 15 years of age a 30-minute break after five consecutive hours are worked. 
  • Minors 14 and 15 years of age may only work in retail, food service, service stations, and other business offices. 
  • Minors 16 and 17 years of age may not work between the hours of 11 p.m. and 5 a.m. when a school day follows, unless they have written permission from their parents and school principal. 
  • Minors 16 and 17 years of age may not work in these hazardous occupations

Hiring

  • Background Checks: Employers who run background checks should ensure they’re following the requirements of the Fair Credit Reporting Act, which are available here.
  • Credit and Investigative Checks: North Carolina does not expressly allow or prohibit employers from obtaining credit checks on applicants or employees.
  • Arrest and Conviction Checks: North Carolina does not expressly allow or prohibit employers from using criminal histories for employment purposes. Employers may not, however, ask applicants about expunged records, and applicants with expunged records may answer in the negative if asked about arrest or conviction records.
  • Mandatory Background Checks: North Carolina requires that employers conduct background checks on the following types of employees:
    • Childcare providers
    • Nursing home personnel
    • Home care agency personnel
    • Adult care home personnel
    • Those working for a mental health provider
    • Those working for a provider of developmental disability services
    • Those working for a provider of substance abuse services

Drug and Alcohol Testing

North Carolina does not require that employers test their applicants or employees for drugs or alcohol. However, if an employer does test their applicants or employees, they must follow these requirements:

  • Conduct testing under reasonable and sanitary conditions
  • Provide employees with a notice of their rights and responsibilities when they are tested
  • Provide employees with their test results within 30 days
  • Provide employees with notice of their retesting rights within 30 days of being tested
  • Allow employees to retest at an approved laboratory after testing positive
  • Confirm an applicant’s positive test with a second test unless the applicant signs a waiver
  • Confirm an employee’s positive test with a second test
  • Use gas chromatography with mass spectrometry or a similar scientific method to confirm a positive test
  • Keep a portion of every sample that tests positive for at least 90 days
  • Establish chain-of-custody procedures for samples
  • For tests required under federal law, report positive results to the North Carolina Division of Motor Vehicles within five business days

Meal and Rest Breaks, Overtime

  • The federal overtime rule stipulates that the minimum salary requirement for administrative, professional, and executive exemptions is $684 per week, or $35,568 per year.
  • Employers must pay overtime to non-exempt employees at the rate of 1 ½ times the normal rate for any hours worked past 40 in a workweek. 
  • Aside from the aforementioned mandatory break for employees 14 and 15 years of age, employers aren’t required to provide rest breaks or meal breaks for other employees. 
    • If they choose to provide meal periods, they don’t have to be paid if the employee is not working during the period. 
    • Any additional breaks employers choose to provide must be paid. 

Required Posters

The State of North Carolina requires that employers post the following notices in a prominent location:

  • North Carolina Workplace Laws (N.C. Labor Laws)
  • Unemployment Insurance – Certificate of Coverage and Notice to Workers as to Benefit Rights
  • Workers’ Compensation Notice

Employment Discrimination

  • Federal law makes it illegal for an employer to discriminate on the basis of:
    • Race
    • Color
    • Age
    • Sex
    • Sexual orientation
    • Gender
    • Gender identity
    • Religion
    • National origin
    • Pregnancy
    • Genetic information, including family medical history
    • Physical or mental disability
    • Child or spousal support withholding
    • Military or veteran status
    • Citizenship and/or immigration status
  • In addition, North Carolina law makes it illegal for an employer to discriminate on the basis of:
    • Use of lawful products off the premises during non-work hours
    • AIDS/HIV
    • Sickle cell or hemoglobin C trait
    • Wage garnishment by a public hospital
  • Employers may not discharge or discriminate against an employee because they are a member of the military.
  • Click here to read our blog on what acceptable and unacceptable questions to ask during an interview.

Termination

North Carolina is an employment-at-will state, which means that without a written employee contract, employees can be terminated for any reason at any time, provided that the reason is not discriminatory and that the employer is not retaliating against the employee for a rightful action. 

Whistleblower Protection

Employers may not discharge or discriminate against an employee for exercising their rights under any of the following laws:

  • Wage and Hour Act
  • Workers’ Compensation Act
  • Occupational Safety and Health Act
  • Mine Safety and Health Act

COBRA

  • COBRA is a federal law that allows many employees to continue their health insurance benefits after their employment ends. Because federal COBRA only applies to employers that have 20 or more employees, many states have adopted their own versions of the law, which are known as “mini-COBRAs.”
  • North Carolina’s mini-COBRA allows employees to continue their coverage for up to 18 months. Each individual certification of coverage must contain a notice of the right to continue coverage. Employers may also inform an employee orally or in writing as part of the employment exit process.

Shift Scheduling

There are no laws that dictate how an employer can schedule an employee or how they may adjust the hours that are already scheduled.

Miscellaneous Laws

Employee Monitoring

Employers may not listen to or record their employees’ wire communications unless at least one party to the communication consents.

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