In many ways, the North Carolina Wage and Hour Act (NCWHA) mirrors federal wage laws, including the Fair Labor Standards Act (FLSA). The NCWHA provides increased protection for employees across the state. However, not everyone is familiar with the law. Knowing your rights regarding unpaid bonuses or other lost wages in North Carolina is essential.
North Carolina Employment Law
North Carolina requires employers to pay their employees’ wages at least once per month. However, you can be compensated with bonuses, commissions, or other wage payments as infrequently as annually. If an employer promises these wages, it must be paid under a written policy. Whether to provide amounts in excess of minimum wage and overtime is up to your employer. There are no mandatory requirements other than minimum wage and overtime payments.
However, if an employer promises to pay you additional amounts more than minimum wage (and overtime after 40 hours per week), such as bonuses or commissions, it must pay those promised wages according to its policy. Employers may reduce your wages and bonuses at any time as long as it follows three rules.
- According to N.C. Gen. Stat. § 95-25.13, the employer must “notify employees, in writing or through a posted notice maintained in a place accessible to its employees, at least 24 hours prior to any changes in promised wages.”
- The employer cannot make any retroactive changes to your wages. This means an employer cannot take away wages or benefits already earned.
- The employer cannot reduce your pay such that the employee earns less than the minimum wage of $7.25/hour per hour. Additionally, they must earn overtime at time-and-one-half of an employee’s regular rate.
Unpaid Bonuses and Termination
When an employee is terminated, your wages must be paid on the regularly scheduled payday. Unpaid bonuses, commissions, vacation pay, or other payments (other than hourly rates or salaried amounts) must be paid on the next payday after the amount owed becomes calculable. If an employer has a policy requiring an employee to forfeit bonuses or commissions, the employee losing such bonuses or commissions must be notified before any forfeiture or reduction. Otherwise, the employer owes the employee these wages.
An employer can create its own policies and procedures governing an employee’s wages and benefits. The employer must clearly explain in writing what constitutes a forfeiture. Earned vacation pay, commissions, and bonuses cannot be forfeited unless the employer has a written explanation of how vacation pay, commissions, or bonuses can be lost. Unlike sick leave, commissions or bonuses must be paid following the termination of an employee. This can be overridden only if the employee signed an explicit, written forfeiture provision. Ambiguous provisions are construed in favor of an employee and against an employer.
Costs of Unpaid Wages
Like unpaid overtime and minimum wage violations, an employee with unpaid bonuses, commissions, vacation pay, or other wages may recover double damages and attorneys’ fees from the employer. For example, if your employer owes $15,000 in vacation pay, you may recover up to $30,000, plus attorneys’ fees.
If an employee disputes the amount paid, an employer can only withhold the disputed amount—never the entire paycheck. An employer must pay any agreed upon amount on the regularly scheduled pay period. An employee who cashes a check is not relinquishing their right to sue for any disputed amounts.
Maginnis Howard generally takes unpaid wage claims on a contingency basis, so you are not responsible for the attorney’s fees unless you successfully recover from the employer. We cannot guarantee results, but we have often secured a settlement or judgment that covers all of our attorney fees while allowing the employee to get all unpaid bonuses, commissions, vacation pay, or other payments owed to them.
Representation for Unpaid Bonuses in North Carolina
Determining whether you have a claim for unpaid compensation requires an intensive inquiry into the employer’s pay practices. If you are wrongly denied vacation pay, bonuses, commissions, sick leave, or any other wages from your employer, contact our unpaid wage and overtime lawyers for a free consultation. Maginnis Howard represents clients owed unpaid wages across North Carolina from our Raleigh, Fayetteville, and Charlotte offices. Contact us at (919) 526-0450 or through our contact page.
