Employment and labor laws in North Carolina [Updated 2023]
Employment laws are put in place to guarantee that employees are treated justly in the workplace and protected from work-related hazards. The consequences for employers who violate these rights can be grave.
While there are many federal laws that regulate employment across the US, some conditions are state-specific. North Carolina’s employment laws mirror many of the provisions outlined by federal acts, with the addition of state laws and special provisions that regulate employment and hiring. Compared to other states, North Carolina doesn’t offer extensive benefits and entitlements to workers despite advances in wage transparency, safety, and equal employment initiatives.
Rippling’s Professional Employer Organization service can handle your tax registration and management, ensuring you stay compliant while hiring and managing employees in North Carolina and other states.
Employment vs. labor law: What’s the difference?
Employment and labor laws are frequently treated as synonyms. While they share common characteristics, from a legal perspective, they vary. The primary difference is in whom it concerns. A situation involving an employer and an individual usually relates to employment law. However, in a scenario where an employer and union members are involved, labor law applies.
Here is a short overview of each:
- Employment law focuses on work hours, wages, overtime, hiring practices, workplace discrimination, and retaliation.
- Labor law falls within the scope of employment law and covers union memberships, union dues, and collective bargaining agreements.
Wages and hours in North Carolina
When paying employees in North Carolina, companies must stay compliant with a number of federal and state-specific laws. This applies to both public and private employers. Calculating hourly rates might be tricky, as they are individually assessed for each workweek. On top of that, the state requires employers to declare the employee’s per-hour rate, payday, and payment method in written form.
Minimum wage in North Carolina
Employers in North Carolina are obliged by state laws and federal acts, such as the Fair Labor Standards Act (FLSA), to pay employees at least $7.25 per hour. If the rate that the parties have agreed on exceeds the minimum wage, then the employer needs to pay the promised per-hour rate.
As specified by the North Carolina Department of Labor (NCDoL), the hourly rate is calculated per each workweek separately—not by the number of hours an employee worked each day. Any time exceeding 40 hours within a single week will be seen as overtime, to which federal minimum wage requirements also apply. The only exception is if an employee is determined to be a “salaried-exempt” worker. We discuss overtime pay in detail in the next section.
Rippling makes sure you’re compliant with state regulations whenever setting hourly wages for your employees. It automatically alerts you of any minimum wage violations for the state in which each of your employees is located. This can be particularly helpful when handling salaries for team members based in North Carolina, where you need to run separate hourly rate calculations for each workweek.
Overtime pay in North Carolina
Employers in North Carolina are legally obligated to pay overtime to their employees unless they’re exempt from such requirements. The overtime rate equals 1.5 times the employee’s regular pay rate and applies to all hours exceeding 40 hours per week. The overtime payment is calculated on a weekly rather than daily basis, meaning that each workweek is considered independently. It’s worth noting that salaried employees are also entitled to overtime pay.
Rippling’s payroll software automatically adjusts pay rates to account for overtime hours, ensuring you comply with overtime pay requirements in North Carolina.
Pay transparency in North Carolina
As of mid-2023, over 25% of the US workforce is covered by salary transparency laws. Several states have either enacted or are in the process of introducing pay transparency bills, which require employers to list remuneration ranges in job posts. The aim is to close pay gaps resulting from unequal compensation based on race, gender, age, and other factors. While North Carolina currently doesn’t have a law requiring employers to disclose the expected salary in public job posts, there are laws that grant employees the right to share their wages openly.
There are two acts that affect pay transparency regulations in the state:
- North Carolina’s Wage and Hour Act (WHA) requires hiring parties to specify the terms and conditions of a new employment relationship in writing. This includes the hourly wage, payday, and how and where they will receive their payment. Under this law, any changes to the terms and conditions need to be disclosed in written form, with a notice equivalent to no less than one pay period.
- The National Labor Relations Act (NLRA) outlaws preventing employees from discussing how much they earn and what types of benefits they’re offered. This also covers employee-to-employee conversations.
Rippling applies compensation bands during employee onboarding and flags any unusual cases for further inspection. This lets you approve any exceptions and block others as needed.
Breaks and rest periods in North Carolina
According to the North Carolina Wage and Hour Act (WHA), employers are not required to provide mandatory rest breaks or meal breaks to employees who are 16 years of age or older:
- Only younger employees, i.e., those below 16 years of age, have the right to a break of 30 minutes every five consecutive hours. To ensure that underage and child labor laws are respected, the break cannot be shorter than half an hour to avoid interrupting a continuous period of work.
- Sole enterprises with gross sales or receipts of under $500,000 a year and private non-profit organizations must follow North Carolina’s law on breaks for young employees.
- If an employer decides to provide rest breaks, they can’t be shorter than 30 minutes so that they can be deducted from an employee’s paycheck.
- An employer isn’t required to provide a breakroom for employees, nor must they allow their employees to leave the premises during the 30-minute break (provided that the employee is entirely free from work responsibilities during this time).
Leaves of absence in North Carolina
Every US state, including North Carolina, is subject to the federal Family and Medical Leave Act (FMLA), giving eligible employees the right to 12 weeks of unpaid leave within 12 months. The leave can be taken in the following circumstances:
- If an employee has serious health problems
- To look after a family member who has serious health issues
- To bond with a new child
- To prepare for a family member’s military service or to look after them after injury
Employees who have to look after family members who were injured during military service have the right to 26 weeks of unpaid leave. This leave can’t be extended unless the same family member or a different one gets injured again while on active duty.
As soon as this leave comes to an end, the employee can return to their job.
To qualify for FMLA leave, employees have to:
- Work for a company with a minimum of 50 employees for at least 20 weeks in both the present and preceding year
- Work for that company for 12 months minimum
- Work at least 1,250 hours the previous year
- Work at a site with a minimum of 50 employees within a 75-mile distance
Additionally, employers have to grant their employees time off to perform juror or grand jury duty. They don’t have to compensate them for it, however. If an employee experiences domestic violence or has to take their child to school, they are entitled to unpaid leave (of up to four hours in the latter case).
Pregnancy disability leave in North Carolina
Employees with pregnancy disability might be entitled to leave under North Carolina’s Disability Income Plan—specifically, short-term leave. Eligible employees must:
- Be incapable of performing their standard work
- Have an active employment status the moment they became disabled
- Observe a 60-day wait period before receiving benefits
They must also have a history of contributing to the retirement system for a full year within 36 months before becoming disabled.
Paid sick leave in North Carolina
Employers in North Carolina aren’t required by state laws to offer sick leave—either paid or unpaid. It’s up to the hiring party to decide whether they’d like to offer sick leave benefits. What’s more, even if an employee can prove that they’ve missed work due to health-related reasons (for example, a doctor’s note), they aren’t protected from being dismissed.
The only exemptions are employees who fall under the federal Family and Medical Leave Act. While it formally recognizes an employee’s health-related absence, as mentioned earlier, FMLA only guarantees unpaid leave.
Rippling allows you to automate and customize your leave policy, allowing you to have full visibility into how employees are using it.
Workplace safety in North Carolina
Employers in North Carolina are responsible for guaranteeing their employees a safe working environment. This includes taking measures to prevent on-the-job injuries and health conditions.
For the most part, The North Carolina Occupational Safety and Health Act (OSHA) reflects the standards outlined in the federal OSHA. There are, however, a few state-specific standards, which are specified in Subchapter 7A of the State Act.
Among others, special attention is paid to companies operating in:
- Construction, where workers are potentially exposed to radiation, apply explosives, and engage in steel erection
- Waste operations
- Electric industry, including power transmission and erecting communication towers
- Farming and agriculture, in particular, sanitation
Compliance with OSHA is governed by the Division of Occupational Safety and Health at the North Carolina Department of Labor (NCDoL). If employees believe their right to safe and healthy work conditions has been violated, they can file a complaint with the state or federal agency.
Although not strictly required by federal OSHA, North Carolina requires most companies to adopt a form of an Injury and Illness Prevention Program (IIPP).
The NCDoL observes an Experience Rank Modifier (ERM) score, which ranks employers based on any worker compensation claims filed within the last three years. Under the “Safety and Health Programs” Article of the North Carolina General Statutes (NCGS), any company with a score of 1.5 or higher needs to develop a written safety program. Additionally, any employer with 11 or more employees needs to create a health and safety committee.
With Rippling PEO, you can handle workers’ comp plans in a pay-as-you-go model. You don’t have to pay in advance for the entire year, allowing you to focus on scaling your business in North Carolina and other states stress-free.
Discrimination and harassment laws in North Carolina
According to the North Carolina Equal Employment Practices Act (EEPA), employees working in the state are protected from work discrimination and harassment based on a number of factors. Employees can report cases to the state’s Equal Employment Opportunity Commission (EEOC). This includes incidents relating to:
- Color
- Race
- Ethnicity
- Sex
- Gender identity
- Sexual orientation
- National origin
- Religion
- Pregnancy
- Age (40+)
- Veteran/National Guard status
- Political affiliation
- Disability
- Genetic information
These requirements apply to companies hiring 15 or more employees.
Workplace harassment takes place whenever there is unsolicited behavior or speech directed at an employee based on any of the above factors. If a behavior becomes repetitive—severely affecting the employee’s work performance and well-being—it qualifies as discrimination.
While the state doesn’t specify enforcement agencies, the NC Human Relations Commission may act as an intermediary in finding an amicable resolution to discrimination charges.
Another instance of workplace violation recognized by North Carolina law is sexual harassment. It’s any type of physical or verbal misconduct in which an employee’s superior:
- Clarifies that they’re in the position to promote or degrade the worker in exchange for actions that are sexual in nature
- Makes an advance, and upon rejection, engages in unfair treatment of the employee
Legal requirements for sexual harassment training vary by state. In North Carolina, private sector companies aren’t required by law to run sexual harassment training. However, given the rise of Equal Employment Opportunity plans and court rulings around the country, offering periodic sexual harassment training is now a best practice.
Bear in mind that federal laws make companies responsible for employee harassment and discriminatory behavior, regardless of whether they were aware of the misconduct happening.
Rippling’s Learning Management System comes with ready-to-use, core sexual harassment training courses. These can help ensure that each employee meets the requirements mandated by the state in which they reside.
Unions in North Carolina
A labor union is an organization made of employees who come together with the shared goal of negotiating better work conditions. Usually referred to as collective bargaining, it involves discussions around higher wages, more vacation time, better benefits, etc. The National Labor Relations Act (NLRA) guarantees employees the right to:
- Organize or become part of a union to lead negotiations with their employer
- Bargain collectively by choosing employee reps to set work conditions
- Discuss their employment terms and conditions with co-workers
- Take action to improve working conditions by filing complaints with their employer or the government, or seeking help from a union
- Strike or picket, depending on the reason
- Refuse to join a union
North Carolina is a right-to-work state. This means that right-to-work laws apply, which deem practices like threatening an employee’s job or not hiring a candidate who refuses to join a union illegal.
Here are a few union-related arrangements that are prohibited by North Carolina law:
- The “union shop” arrangement—forcing an employee who has just joined a company whose staff is unionized to join that company’s union and pay union fees.
- The “agency shop” arrangement—it’s similar to the arrangement above, with the only difference being that the new employee is not pushed into joining the union but still has to pay union fees.
- The “fair share” arrangement—the new employee isn’t expected to join the union nor to pay its fees in full. But, they’re required to contribute a fraction of the union dues to improve work conditions for everyone.
FAQs about North Carolina labor and employment laws
Are independent contractors covered under North Carolina employment laws?
In North Carolina, courts refer to common law to decide whether a worker’s relationship with a company qualifies as employment. The Wage and Hour Act doesn’t mention independent contractors, per se. There are no state-specific laws that would regulate the rights of independent contractors, including how they’re compensated and whether their hours are regulated.
Does at-will employment exist in North Carolina?
Yes. North Carolina is an at-will employment state. If there isn’t an employment contract stating otherwise, employers can fire an employee without warning or reason. The same applies to employees–they can quit without notice.
What privacy rights do employees have in North Carolina?
North Carolina doesn’t offer any workplace-specific privacy laws. All privacy breaches are treated with the same standards regardless of where they happen.
Are background checks legal in North Carolina?
Yes, background checks are legal, and both private and public employers can ask for one before recruiting an employee. Most background checks in North Carolina include criminal history, employment eligibility, work history, identification verification, etc. Employers in North Carolina are also allowed to drug test employees and job applicants as long as they follow state procedures.
Are whistleblowers protected in North Carolina?
Yes, whistleblowers in North Carolina are protected by federal laws and the North Carolina False Claims Act (FCA) from their employers’ retaliation.
Is workers’ compensation coverage required in North Carolina?
Yes, it is. According to the North Carolina Workers' Compensation Act (NCWCA), businesses that have three or more employees must have compensation insurance.
Are there required healthcare benefits in North Carolina?
Under federal law, employers with 50 or more full-time employees need to offer healthcare benefits, including health insurance.
Are North Carolina employers required to provide bereavement leave?
Employers in North Carolina are not legally obliged to offer bereavement leave—either paid or unpaid—or any time off to participate in a close family member's funeral.
What employee protections are available in North Carolina if layoffs occur?
In a scenario where an employee is laid off in North Carolina, the employer is required to pay the final paycheck. It must be settled on the upcoming scheduled payday. Additionally, laid-off employees may be subject to unemployment insurance, which lasts between 12 and 20 weeks. Employees can receive up to $350 per week.
Employees who feel that they’ve been laid off unlawfully, for instance, as an act of retaliation, can also file their complaint to the Retaliatory Employment Discrimination Bureau, which is responsible for safeguarding the Retaliatory Employment Discrimination Act (REDA).
Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
