There are many things to consider when pursuing an employer for wages owed. In this post we discuss the relevant federal and state-level labor laws as they apply to North Carolina employees to help you determine whether you need an unpaid wages attorney to take on your case.
Background
There are two key pieces of legislation relating to unpaid wage claims in North Carolina. The first, the federal Fair Labor Standards Act (FLSA), sets minimum wage, overtime pay, record-keeping, and youth employment standards for employees across the nation. As of 2021, the FLSA mandates a minimum wage of no less than $7.25 per hour and an overtime of no less than one and one-half times the regular rate of pay after 40 hours worked.
North Carolina’s Wage and Hour Act closely reflects the principles of Federal law, with a few key standards for what qualifies as an “employee”.
An employer who fails to pay wages may owe an employee for double the amount owed and attorney’s fees. For example, if an employer owes $15,000 in wages, a judge can award the employee $30,000. Further, an employee represented by an attorney in an unpaid wages lawsuit could recover attorneys’ fees, court costs, and interest.
Wages and Bonuses
An employer can create its own policies governing employee wages and benefits within the bounds of Federal and state laws. At a minimum, the NCWHA requires employers to pay regular wages once a month. Employers can also compensate their workers with bonuses, commissions, or miscellaneous 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 pursuant to 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
It is entirely legal for an employer to reduce wages and bonuses at any time as long as the following conditions are met:
- Pursuant 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.”
- Employers cannot take away wages or benefits an employee already earned.
- The employer cannot reduce pay such that the employee earns less than the minimum wage amount of $7.25 per hour. Employers cannot reduce overtime at time-and-one-half of an employee’s regular rate.
Unpaid Wages Upon Termination
A particular spot of contention upon termination surrounds which wages are paid out and which can legally be withheld. After terminating an employee, the employer is still required to release any wages the employee earned beforehand. Unpaid bonuses, commissions, vacation or other payments (excluding hourly rates or salaried amounts) must be paid on the next payday.
However, a written employment contract provision, known as a forfeiture clause, can prevent an employee from obtaining certain wages upon termination. In this clause, employers can specify what will not be paid to an employee upon his or termination. Examples of eligible forfeiture payments include earned vacation pay, commissions, and bonuses.
If a forfeiture provision contains a lot of ambiguity, the ruling generally falls in favor of the employee. The penalty for this type of violation is similar to unpaid overtime and minimum wage violations. Unpaid bonuses, commissions, vacation pay, or other wages can cost an employer double damages and attorneys’ fees.
North Carolina Unpaid Wages Attorney
Awaiting unpaid wages? The experienced attorneys at Maginnis Howard are proud to advocate for North Carolina employees. Our firm takes wage and hour/overtime cases throughout North Carolina, particularly those involving groups of workers. Contact the firm to discuss your overtime claim today or submit a confidential new case inquiry here.
