What is the minimum wage in North Carolina?
The minimum wage in North Carolina is $7.25 per hour for nonexempt employees. North Carolina’s minimum wage is the same as the federal minimum wage requirement. If an employee works a 40-hour week at the North Carolina minimum wage rate, it equals $290 per week.
North Carolina minimum wage laws
Minimum wage laws exist to provide protection for workers. Without minimum wage laws, employers could take advantage of workers who are desperate for employment. The laws set a baseline for providing an hourly wage that allows the worker to afford basic expenses and avoid extreme poverty.
The minimum wage in North Carolina last increased in 2008 along with the federal minimum wage. It increased by $0.70 from $6.55 to $7.25 at that time. There are some exemptions to the minimum wage requirement in North Carolina. Exempt categories include agricultural workers, domestic workers, pages in the North Carolina General Assembly or the Governor’s office, models, actors and performers.
Under the North Carolina Wage and Hour Act, any company in North Carolina that doesn’t pay minimum wage when it’s required is liable to the employee “in the amount of their unpaid minimum wages, their unpaid overtime compensation, or their unpaid amounts due under G.S. 95-25.6 through 95-25.12, as the case may be, plus interest at the legal rate set forth in G.S. 24-1, from the date each amount first came due.” The court can award the employee an additional amount equal to what is owed as liquidated damages. The court might also “order costs and fees of the action and reasonable attorneys’ fees to be paid by the defendant.”
The North Carolina Department of Labor requires businesses to display the Wage and Hour Notice to Employees and OSH Notice to Employees posters, which cover the laws on wages, hours, occupational safety and health laws, and employment discrimination. You must post them in a conspicuous place where you normally place notices for your employees. You can get free copies of the posters for your business.
North Carolina minimum wage for servers and other tipped employees
North Carolina allows an employer to take a credit for part of the tips earned by an employee to count toward the minimum wage rate. In other words, the employer can pay a lower hourly rate because the tips help cover part of the minimum wage. You’re required to notify your tipped employees ahead of time about the tip credit. They must also be allowed to keep all of their tips and must certify the amounts monthly or per pay period.
A tipped employee in North Carolina is any worker who customarily earns over $20 in tips each month. This is usually an employee who provides direct customer service, such as a server, bartender, barista or hairstylist.Tips are considered to be any amount above the amount due that is left for the employee by the patron.
In North Carolina, the lowest amount an employer can pay a tipped employee is $2.13 per hour. The employee must earn enough tips to reach at least $7.25 per hour, or at least $5.12 per hour in tips. If the employee comes up short, the employer must pay them a hourly wage sufficient to reach the minimum wage rate.
It’s ultimately your responsibility as a business owner to make sure all of your employees earn at least minimum wage. To make sure your employees earn enough between the hourly rate and tips, you need to track their tips accurately and regularly. Add the hourly pay and the tips each employee earns and divide by the number of hours worked to ensure they earned at least $7.25 per hour.
Tip pooling is allowed in North Carolina. This occurs when all tips are collected and redistributed between the business’ tipped employees. Each tipped employee must be able to keep at least 85% of the tips they receive. Using the tip pooling arrangement requires accurate recordkeeping to ensure each employee gets their share of the tips as required by the law.
North Carolina minimum wage overtime pay
North Carolina labor laws require employers to pay one and a half times the regular pay rate for overtime beyond 40 hours per week. If an employee earns the minimum wage, the overtime rate is $10.88 per hour. The number of hours worked per day and the number of days worked per week don’t have an impact on overtime in North Carolina. It’s strictly based on total hours worked for the week.
To calculate overtime pay, multiply the number of hours beyond 40 by the overtime rate. If a minimum wage employee works for 56 hours during the week, they have 16 hours of overtime. The overtime pay for those 16 hours is $174.08 on top of the normal pay for the regular 40 hours.
