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Changes or Reduction in Wages

An employer can change its wage agreement with an employee at any time, regardless of what the original wage agreement was and without the employee's permission. There are certain requirements that an employer must meet pursuant to the N.C. Wage and Hour Act (WHA) to make changes in its wage agreements, including the reduction of an employee's pay or wage benefits:

1) An employer must notify its employees in writing at least 24 hours prior to any changes in its wage agreements that result in the reduction in pay or wage benefits, pursuant to N.C.G.S. §95-25.13(3).

2) An employer cannot make changes in pay or wage benefits that result in the retroactive reduction of wages or wage benefits that are already earned. In other words, the reduction in wages cannot take away pay or wage benefits that have already been earned up to the time of the notification. Any reduction in pay or wage benefits must be prospective from the time of notification. An employer may, however, retroactively increase an employee's pay or wage benefits without prior notification.

3) An employer cannot reduce an employee's pay below the minimum wage, which is currently $7.25 an hour. However, the employer can reduce an employee's rate of pay all the way down to the minimum wage with proper written notification. An employer also can take away all future earnings of wage benefits from the time of the written notification including the 24-hour notice period.

July 24, 2009

N.C. Department of Labor
Wage and Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699-1101
919-807-2796 or (toll-free NC only) 1-800-NC-LABOR
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