North Carolina Labor Law Guide

What’s new in 2023

• New taxable wage base for unemployment insurance

Federal law posters

State law posters

Wage and Hour Laws

Minimum Wage

The minimum wage in North Carolina is $7.25 per hour. All employers must display a wage and hour poster in the workplace notifying employees of their rights. 

Under North Carolina law, the minimum wage must be the same as the federal minimum wage (currently $7.25 per hour) if this wage is higher than that set by state law. 

Minimum wage law in North Carolina applies to all employees except those who are exempt under federal or state law. 

Employees exempt from North Carolina minimum wage law include:

• Exempt employees and occupations under the federal Fair Labor Standards Act (FLSA).
• Employees with disabilities if the employer has a certificate from the North Carolina Wage and Hour Bureau (generally no less than 50% of the standard minimum wage, except in certain circumstances).
• Apprentices (no less than 90% of the standard minimum wage).
• Learners, including student learners (no less than 90% of the standard minimum wage).
• Student workers (no less than 90% of the standard minimum wage).
• Tipped workers (see below).

Tipped Minimum Wage

Employers must pay tipped employees at least $2.13 per hour as long as the tips employees receive and this wage adds up to the minimum wage ($7.25).

For an employer to pay the tipped minimum wage:

• Employees must regularly receive more than $20 a month in tips.
• Employees can keep all tips if they wish, except where they’re required to join a tip pool.
• Employers must notify employees in advance that they’ll receive the tipped minimum wage.
• Employers must keep a detailed record of the tips employees receive each pay period or month to be certified by employees by signing or initialing the record.

Tip pooling is permitted for businesses covered by the North Carolina Department of Labor. 

Where tip pooling applies, employees must be given advance notice of it. Employees can only be required to pool up to 15% of their tips. Only tipped employees can join the tip pool. Employers must keep records of tips received and pooled. 

Credit card tips must be paid to employees by the next payday at the latest. Employers can deduct credit card fees from tips. 

Overtime Laws

There’s no state-based overtime law in North Carolina. Instead, the FLSA overtime provisions apply to all non-exempt employees. 

Under the FLSA, overtime is any hours over 40 hours in a workweek. A workweek is any period of 168 consecutive hours or 7 consecutive 24-hour periods. 

Overtime must be paid at a minimum of 1.5 times employees’ regular rate of pay.

When calculating overtime pay for tipped employees, employees’ regular rate of pay includes both their wages and tip credit that’s counted as wages (minimum $7.25 per hour). 

Private employers can’t give employees compensatory time (paid time off in lieu) instead of paying them for overtime. 

Meal and Rest Breaks

Under North Carolina labor laws, certain employers—generally businesses with more than $500,000 in gross annual sales and private non-profit organizations—must give employees under 16 a minimum 30-minute break after 5 hours of work. 

Employers aren’t required by law to provide employees over the age of 16 with meal or rest breaks. 

Where they choose to do so:

• Breaks under 30 minutes can’t interrupt a continuous period of work. This means that any breaks under 30 minutes generally must be paid under state law. 
• Under federal law, meal breaks under 20 minutes must be paid. 
• Meal breaks over 30 minutes can be unpaid. 
• During unpaid breaks of 30 minutes or longer, employers can require employees to remain on-premises but they must be relieved of all work duties during this time.
• Employers don’t need to provide a breakroom. 

Recordkeeping (Wage and Hours)

Employers covered by the North Carolina Wage and Hour Act must keep an accurate record of the workweek of each non-exempt employee. 

The record must include the employee’s:

• Full name and address.
• Date of birth, if under 20 years of age.
• Occupation or job title.
• Time and day of the week that their workweek starts.
• Regular rate of pay.
• Hours worked each day and totaled for the workweek.
• Total regular earnings each workweek.
• Total overtime earnings each workweek.
• Total additions or deductions.
• Total gross wages paid each pay period and date of payment.

North Carolina employers must also record the start and finish times for employees under 18 and retain any records required to calculate wages, such as timesheets. 

Employers must keep wage and hour records for 3 years. 

Employee Scheduling Laws

North Carolina doesn’t have any predictive scheduling or advance notice laws regarding scheduling changes. 

Employee Compensation and Benefits

Reporting Time Pay

NC labor laws don’t require employers to pay reporting time. 

Employers aren’t required to pay employees for attending a shift but not working it. Employers also aren’t required to pay employees for a minimum number of hours if they don’t work their full shifts. Employees must be paid for the hours they work. 

Payday Frequency and Method

The North Carolina Wage and Hour Act lets employers pay employees daily, weekly, bi-weekly, semi-monthly, or monthly. Paydays must be regularly scheduled. 

Employers can choose the payment method—including cash, check, direct deposit, money order, or payroll card—as long as employees receive full payment on their payday. 

Employers can only use direct deposit for an account chosen by the employee or financial institutions whose deposits are insured by the federal government. Employers may require employees to accept payment via direct deposit, but only if the employee chooses the account and only if the direct debit costs won’t result in the employee receiving less than the minimum wage. 

Some forms of compensation, like commissions and bonuses, can be paid annually if the employee is given notice of this. 

At the time of hire, employers must give employees written notice of their promised wages and the day and location of payment (if the employer delivers the wages in person) or the payment method. Promised wages include pay rates higher than the legal minimums, a weekly or monthly salary, commissions, bonuses, shift differential pay, and wage benefits, such as leave. 

Employers must provide 24 hours’ notice if they make any changes to employees’ wages. They can do this by notifying employees in writing or by posting a notice in a prominent place in the workplace. 

Pay stub Requirements

Employers must provide employees with a written pay stub for each pay period. 

Pay stubs must include details of the amount of wages for the pay period and any deductions. 

Wage Deductions and Garnishments

Under North Carolina law, employers can make deductions from employees’ wages when:

• They’re required by federal or state law (for example, payroll taxes).
• There’s a written authorization from the employee stating the amount of the deduction and the reason for it (for example, for uniforms or a work phone).

Employers can also make deductions for cash or inventory shortages, as well as loss or damage to the employer’s property. In these cases, employees must sign a written authorization and the employer must give the employee 7 days’ notice of the deduction. 

Any deductions from an employee’s wages must be itemized in a written statement of deductions and given to the employee. 

Deductions for the employer’s benefit can’t result in an employee receiving less than the minimum wage. They also can’t be taken from overtime. 

In North Carolina, employers may be required by a court order to garnish employees’ wages to pay creditors for:

• Income taxes.
• Student loans.
• Child support and alimony.
• Ambulance services (in certain counties).
• Administrative costs of court-ordered garnishments.

Certain limits apply to different categories of garnishment. Federal law also generally limits garnishments to 25% of an employee’s weekly disposable earnings or 30 times the federal minimum hourly wage. 

Employers can’t terminate an employee’s employment based on a single wage garnishment. However, employers may be able to fire employees with multiple wage garnishments. 

Final Paycheck Laws

Following termination, employees must receive their final paycheck on or before the next regularly scheduled payday. Their final paycheck should be paid as usual unless the employee requests it via trackable mail. 

Accrued vacation leave, commissions, and bonuses can be forfeited only if there’s a specific clause in the employer’s relevant policy. 

Workers’ Compensation

Under the North Carolina Workers’ Compensation Act, businesses with 3 or more employees must have workers’ compensation insurance. 

Some employees are exempt from workers’ compensation coverage under the Act. These include:

• Casual employees who don’t work regular hours.
• Domestic employees.
• Farmworkers on farms with less than 10 employees.

The cost of a workers’ compensation insurance policy depends on a business’s size, type of work, length of operation, and type of employees. 

This insurance helps cover the costs of a workplace injury or illness. Insurance may cover the costs of an employee’s lost wages, medical treatment, ongoing care, and temporary and permanent disability benefits. 

Employees who are injured or become ill due to work have 30 days to report the injury or illness in writing to their employer. They also need to file a workers’ compensation claim with the North Carolina Industrial Commission and have up to 2 years to do so. 

Employers must file a first report of injury with the Industrial Commission within 5 days of receiving written notice of an employee’s work-related injury or illness. 

Employers with workers’ compensation insurance must post a notice about it in the workplace, informing employees of the claim process. 

The Industrial Commission resolves any disputes about workers’ compensation, generally through mediation first and then at a formal hearing. 

Unemployment Insurance

Most North Carolina employers are required to pay unemployment insurance (UI) tax. 

These include:

• Employers with a gross payroll of a minimum of $1,500 in any calendar quarter or at least 1 employee for 20 or more weeks during the calendar year.
• Non-profits with at least 4 workers for 20 or more weeks during the calendar year.
• Employers covered by the Federal Unemployment Tax Act.
• Employers who elect to pay unemployment insurance tax.

The amount of UI tax employers pay for each employee is calculated on the employee’s taxable wage base, currently the first $29,600 of an employee’s annual wages. 

The UI tax rate starts at 1% for new employers and can increase or decrease for other employers, depending on their experience. The maximum UI tax rate is 5.76%.

North Carolina also charges an annual 20% surtax if the amount in the Unemployment Insurance Trust Fund (where the UI tax employers’ pay is held) is less than $1 billion.

North Carolina UI tax funds unemployment benefits for eligible employees who have lost their jobs. 

To be eligible for unemployment benefits, an employee must:

• Have lost their job through no fault of their own.
• Have worked for approximately 6 out of the last 15 months for an employer who pays unemployment insurance taxes.
• Be able and available to work.
• Be actively looking for work.
• Accept any appropriate job offers.

Eligible employees may be able to access unemployment benefits up to $350 a week for up to 12 weeks. Employees can apply for unemployment benefits online via the Division of Employment Security’s website. 

Employers must prominently display an unemployment benefits poster informing employees of their eligibility for unemployment benefits and how to apply. 

Workplace Rights and Protections

Discrimination and Harassment

Federal anti-discrimination law prohibits employers from discriminating based on:

• Race.
• National origin.
• Color.
• Citizenship status.
• Religion.
• Sex (including pregnancy).
• Sexual orientation.
• Gender identity.
• Age (40+).
• Disability.
• Genetic information.

These prohibitions apply to all employers with 15 or more employees—except for age (20 or more employees), citizenship status (4 or more employees), and equal pay (all employers). 

In North Carolina, employers with 15 or more employees are also prohibited from discriminating based on:

• AIDS/HIV status.
• Sickle cell or hemoglobin C trait.
• Lawful use of lawful products outside of work.
• Military service or status.

These prohibitions apply to all stages of the employment process, from job advertisements to termination of employment. 

The process for filing a complaint depends on the nature of the discrimination. 

Employees who feel discriminated against based on a protected characteristic under federal law can file a complaint with the Equal Employment Opportunity Commission (EEOC).

Employees must file their EEOC complaint within 180 days of the alleged discrimination. This may be extended to 300 days if a state agency enforces a law prohibiting discrimination on the same basis as the employee’s complaint under federal law. The EEOC will notify the employer and investigate the alleged discrimination. 

If the EEOC doesn’t have reasonable cause to believe discrimination occurred, it issues a Dismissal and Notice of Rights that allows the employee to file a discrimination lawsuit against the employer should they wish to do so. 

If the EEOC finds discrimination occurred, it will try conciliation with the parties to find a way to address the issue. If conciliation is unsuccessful, the EEOC can issue a Notice of Right to Sue, allowing the employee to file a lawsuit against the employer. 

Private employees can file a lawsuit against the employer if the characteristic is protected under state law only. State employees can, alternatively, lodge a complaint with the North Carolina Civil Rights Division’s Employment Discrimination Section (CRD-EDS). 

Complaints under the Retaliatory Employment Discrimination Act can be filed with the Retaliatory Employment Discrimination Bureau of North Carolina’s Department of Labor. 

Leave Laws

✔ Family and Medical Leave	The federal Family and Medical Leave Act (FMLA) applies to employees in North Carolina who:Have worked for the employer for at least 12 months and 1,250 hours in the previous year.Work for an employer with at least 50 people. Under the FMLA, employers must provide employees with a maximum of 12 weeks of unpaid leave in a 12-month period to:Address their own or a family member’s serious health condition.Bond with and care for a new child.Support a family member’s military service or injury sustained while serving active duty. Leave for supporting a family member injured while serving can be extended up to 26 weeks.  Employees returning from FMLA leave must be reinstated to the same or equal position as before they left. Employees can be required or choose to use accrued paid leave during FMLA leave.
𐄂 Paid Sick Leave	North Carolina employers do not have to offer employees paid or unpaid sick leave.  However, many employers choose to do so. Where they offer paid sick leave, employers should comply with their policy and any relevant employment contract terms.  Eligible employees in North Carolina may be able to access unpaid sick leave under the FMLA (see above).
𐄂 Paid Family Leave	North Carolina employers aren’t required to offer paid family leave.  Where they do so, they must follow the rules under their relevant policy and employment contract.  Eligible employees may be able to access unpaid FMLA leave to care for a sick family member (see above).
𐄂 Vacation and Personal Leave	North Carolina employers aren’t required to offer employees vacation or personal leave, paid or unpaid. However, many employees choose to do so. Where an employer does offer this leave, they must follow the relevant provisions set out in their vacation or personal leave policy and employment contract.  If an employer has a vacation leave policy, it must include information about:How and when employees accrue vacation leave. Whether employees can carry over accrued vacation leave into a new year and any rules around doing so. (North Carolina employers can implement a “use it or lose it” policy.)When employees must take vacation leave.Whether employees can be paid for accrued vacation leave rather than taking time off.How accrued vacation leave may be forfeited when an employee’s employment is terminated. Employers must also communicate any pay policies, including leave policies, to their employees.
𐄂 Holiday Leave	Private employers in North Carolina aren’t required to offer leave for state holidays, paid or unpaid.  Employers that require employees to work holidays don’t need to offer premium holiday pay rates.  Employers that choose to offer holiday leave should follow the relevant policy and terms of the employment contract.
𐄂 Pregnancy and Parental Leave	Employers in North Carolina aren’t required to provide paid or unpaid pregnancy or parental leave.  Those that choose to do so must follow their relevant policy and employment contracts.  Eligible employees may be able to access up to 12 weeks of unpaid FMLA leave to bond with or care for a new child.

Military, Jury Duty, and Other Mandatory Leave

There are several other types of mandatory leave in North Carolina. 

Military Leave	All employers must give employees who are members of the state’s National Guard leave for active or emergency duty. This leave doesn’t have to be paid.  Serving employees are protected from being fired or denied reemployment as a result of their military service.
Jury Duty Leave	While employers aren’t required to pay employees for jury duty leave, they can’t demote or fire an employee for serving on a jury.
Protection Order Leave	All employees in North Carolina can take reasonable time off to seek a domestic violence protection order without being disciplined, demoted, or fired.  Employers can require employees to provide supporting documents.
Parental Involvement Leave (Small Necessities Law)	All North Carolina employers must give employees up to 4 hours of annual paid leave to attend or be involved with their child’s school.  Employers can require employees to provide up to 48 hours of written notice for this leave.

Child Labor Laws

Children under the age of 14 generally can’t work in North Carolina except if they work for their parents, deliver newspapers, or are models or actors. 

Children aged 14 to 17 require a Youth Employment Certificate from the Department of Labor to work. The process to obtain a certificate involves the child, their parent or guardian, and their employer. Employers must keep Youth Employment Certificates for 3 years after the employee turns 18 or leaves the job. 

Employers must give employees under 16 a 30-minute break after every 5 consecutive hours of work. 

The North Carolina Wage and Hour Act restricts the working activities and working hours of employees aged 14 to 17 years old. 

Failure to follow the laws around youth employment in North Carolina may result in civil penalties of up to $500 for first violations and up to $1,000 for subsequent violations. 

	14 and 15-year-olds	16 and 17-year-olds
When school is in session	Can work up to 3 hours a day outside school hours, up to a maximum of 18 hours a week	No limitations
When school isn’t in session	Can work up to 8 hours a day, up to a maximum of 40 hours per week	No limitations
Limit on hours	Can work only between 7 am and 7 pm From June 1 to Labor Day, can work until 9 pm	Cannot work between 11 pm and 5 am the evening before a school day, unless the employer has permission from the minor’s parents and school principal
Limit on types of work	14- and 15-year-olds cannot work:In manufacturing or mining.On construction sites.For a business with a permit to sell or consume alcohol on-premises.In any hazardous or detrimental jobs.	16- and 17-year-olds cannot work in hazardous jobs, including:Manufacturing and storing explosives.Those that involve driving a motor vehicle or being an outside helper.Coal mining.Power-driven bakery machinesRoofing operations. 16- and 17-year-olds can drive motor vehicles for business purposes in certain circumstances.  They also cannot work in specific detrimental jobs, including:Welding, torch cutting, and brazing.Any work involving the risk of falling 10 feet or more.As an electrician or electrician’s helper. Full list of jobs that 16- and 17-year-olds cannot work in North Carolina.

Workplace Safety and Health

North Carolina is covered by the federal Occupational Safety and Health (OSH) Act via an approved State Plan. 

This State Plan is administered and enforced by the North Carolina Occupational Safety and Health (NC OSH) Division of the Department of Labor. It covers most private employers with some limited exceptions. 

North Carolina’s State Plan largely adopts the workplace safety standards set by the federal Occupational Safety and Health Administration (OSHA). 

The NC OSH Division can conduct workplace safety inspections and issue citations and civil penalties for employer breaches. 

Employers must provide employees with a hazard-free workplace. There are specific OSH requirements for certain industries, including construction, agriculture, and shipyards. These standards are available via the OSHA website. 

Employers can’t discriminate against an employee for flagging safety and health concerns or making a formal complaint. 

Employers with 11 or more employees must maintain up-to-date injury and illness records for their workplace. They must generally keep these records for 5 years. 

The employer must report any workplace fatalities to the NC OSH Division by phone within 8 hours. 

The employer must report to the NC OSH Division by phone or online within 24 hours any work-related injury that results in: 

• An employee’s in-patient hospitalization.
• An amputation.
• The loss of an eye.

Employees must follow OSH standards and rules and have the right to file a complaint with the NC OSH Division in relation to any workplace safety and health concerns. 

Labor Union Regulations

North Carolina is a right-to-work state. This means employers can’t require employees to join a labor union or not join a labor union as a condition of employment. 

Under federal law, employees in the private sector have the right to join and organize a union. This protects certain activities such as employees:

• Discussing wages and benefits with their colleagues.
• Circulating petitions in relation to working conditions.
• Wearing a union button or t-shirt.

Employers can’t take adverse action against employees for joining a union or participating in union activities. 

While public employees can join unions and negotiate wages, benefits, and working conditions, unions and public employers are prohibited from negotiating collective bargaining agreements. 

Employment Contracts and Severance

Employment Contract Laws

North Carolina is an at-will state. This means either the employer or employee can terminate employment at any time without reason. 

Employment contracts replace at-will employment by setting out the period of employment, termination processes, and the employment relationship more generally. 

Non-compete and non-solicitation agreements are allowed in North Carolina. However, these agreements must meet specific conditions to be enforceable. 

Restrictions include the following:

• They must be in writing and part of a signed employment contract. 
• Agreements must be based on valuable consideration. This means the employee must receive something in return for their agreement, such as a job—if the agreement is signed as part of the initial employment contract—or severance pay. 
• Agreements must relate to a reasonable length of time, geographic area, and scope. 
• They must be reasonably necessary to protect a legitimate business interest—for example, a business’s intellectual property. 

Severance Pay

Employers in North Carolina aren’t required to provide severance pay to employees on the termination of their employment. 

Where they do, employers should follow their relevant policy and sections of the employment contract. 

Additional Laws That Might Apply to You

Mini-COBRA Law	Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), certain employees’ health benefits continue for a limited time upon the termination of their employment. However, COBRA applies only to employers with 20 or more employees.  North Carolina’s “mini-COBRA” law lets employees continue their basic health coverage for up to 18 months after their employment is terminated or hours are reduced.  To be eligible, employees must have been continuously insured for the 3 months prior to their termination.  Employees have the right to be notified of these rights via their certificates of coverage.
Whistleblower Protections	North Carolina employees are protected when exercising their rights under labor laws—including the Wage and Hour Act, Occupational Safety and Health Act, Workers’ Compensation Act, and Mine Safety and Health Act.  Employers can’t discriminate or retaliate against an employee for doing so.
Drug and Alcohol Testing	North Carolina employers can but aren’t required to drug test job applicants or employees. Where they do, they must:Conduct the testing under reasonable, sanitary, and minimally invasive conditions.Notify employees of their rights when tested.Give employees their test results in 30 days.Notify employees of their retesting rights within 30 days of being tested.Let employees retest at an approved laboratory following a positive result.Confirm a positive test with a second test (job applicants can waive this) using gas chromatography with mass spectrometry or an equivalent scientifically accepted method.Keep a portion of samples that test positive for at least 90 days.Use chain-of-custody procedures for samples. Employers who fail to follow these requirements can face civil penalties of up to $250 per affected applicant/employee.
Lactation Breaks	Under federal law, employers must provide employees with a reasonable amount of break time and a private space (other than a bathroom) to express milk for up to 1 year after the birth of their child.

COVID-19 Related Laws and Regulations

North Carolina repealed its Emergency Temporary Standard for Healthcare on March 2, 2022. 

General NC OSH and federal OSHA standards continue to apply, including in relation to COVID-19. 

Private employers are generally allowed to require employees to get the COVID-19 vaccine, with limited exceptions for medical or religious reasons. 

Navigating Legal Issues and Resources

To learn more about labor laws in North Carolina, visit the North Carolina Department of Labor’s website or contact its toll-free number at 1-800-625-2267. 

Employees may be able to access free employment law advice via NC Free Legal Help (run by North Carolina Advocates for Justice) or Legal Aid. 

Labor laws in North Carolina cover a wide range of issues, including wage and hour regulations, discrimination, mandatory leave, and workplace health and safety. Navigating them requires a deep understanding of the relevant laws and regulations at the federal, state, and local levels. 

You should speak with your legal department or a labor law attorney to get personalized advice specific to your situation and gain a full understanding of your obligations as an employer in North Carolina. 

Disclaimer

The information presented on this website about North Carolina labor laws is intended to be a summary for informational purposes only. However, laws and regulations regularly change and may vary depending on individual circumstances. While we have made every effort to ensure the information provided is up-to-date and reliable, we cannot guarantee its completeness,  accuracy, or applicability to your specific situation. Therefore, we strongly recommend that readers seek guidance from their legal department or a qualified attorney to ensure compliance with applicable laws and regulations. Please note that we cannot be held liable for any actions taken or not taken based on the information presented on this website.