In many ways, the North Carolina Wage and Hour Act mirrors federal wage laws, including the Fair Labor Standards Act. The North Carolina Wage and Hour Act provides increased employee protection in various ways. If you work in North Carolina, you should know the different laws, especially those related to unpaid bonuses, commissions, tips, vacation pay, or other wages owed.
Wages and Bonuses
North Carolina law requires employers to pay employees wages at least once per month. However, employers can also compensate their workers with bonuses, commissions, or other wage payments as infrequently as annually. If an employer promises wages (benefits, vacation pay, sick pay, jury duty pay, holiday pay, etc.), it must be paid according to a written policy. Whether to provide amounts over minimum wage and overtime is up to your employer; there are no mandatory requirements other than minimum wage and overtime payments.
However, suppose an employer promises to pay you additional amounts in excess of minimum wage (and overtime after 40 hours per week), such as bonuses or commissions. In that case, it must pay those promised wages according to its policy. Employers may reduce wages and bonuses at any time, as long as the employer follows three rules:
- Under 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 retroactive changes to your wages. This means an employer cannot take away wages or benefits an employee has already earned.
- The employer cannot reduce your pay such that the employee earns less than the minimum wage of $7.25/ hour and less than overtime at a time-and-a-half of an employee’s regular rate.
Unpaid Wages upon Termination
Even when terminating an employee, the employer still owes them their remaining wages. Unpaid bonuses, commissions, vacation, or other payments (excluding hourly rates or salaried amounts) must be paid on the next payday. If an employer has a policy that requires an employee to forfeit bonuses or commissions, the employee losing such bonuses or commissions must be notified prior to any forfeiture or reduction; otherwise, the amount is owed.
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 are not eligible for forfeiture unless the employer has pre-established policies regarding forfeiture.
Unlike sick leave, employers must pay commissions or bonuses after an employee’s termination unless there is a written forfeiture provision. If a forfeiture provision contains ambiguity, the ruling generally favors the employee.
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 an employer owes you $15,000 in earned vacation pay, you could recover up to $30,000. Our firm accepts unpaid wage claims on a contingency basis, so you don’t owe attorneys’ fees unless we recover damages.
North Carolina Unpaid Wages Attorney
Awaiting unpaid wages? Contact Maginnis Howard to schedule a consultation. There is no obligation to hire us, we are happy to discuss your initial options at no cost to you.
Maginnis Howard is a North Carolina firm handling unpaid wages cases dealing across the Carolinas, particularly when those involve groups of workers. Contact the firm to discuss your overtime claim today or submit a confidential new case inquiry here. You may also visit our Raleigh, Charlotte, or Fayetteville offices for more information.
