Promised
Wages Including Wage Benefits
An employer must pay its employees at least the minimum wage for all hours worked, and time and one-half overtime pay based on an employee's regular rate of pay for all hours worked in excess of 40 in a workweek unless the employee is exempt for some reason. Currently the minimum wage in North Carolina is $6.55 an hour. It will increase to $7.25 an hour effective July 24, 2009. But this is all an employer must pay its
employees by statute pursuant to the North Carolina
Wage and Hour Act (WHA). An employer is not required
to pay its employees more in wages than is required
by the minimum wage and overtime pay provisions.
Likewise, an employer is not required by law to
give mandatory wage benefits such as vacation pay,
sick leave, jury duty pay, and holiday pay to its
employees regardless of how many hours a week they
work. The giving or not giving of promised wages,
including wage benefits, is entirely up to each
employer. "Promised wages" can be an hourly
rate that is more than the minimum wage, overtime
pay for certain days worked rather than the statutory
requirement of paying overtime pay for the hours
worked in excess of 40 in a workweek, shift differential
pay, commissions, bonuses, piece-rate, production
pay, a weekly salary, a monthly salary, or mileage
expenses. "Wage benefits" are benefits
such as, but not limited to, vacation pay (including
PTO and PDO leave), sick leave, jury duty pay, and
holiday pay.
Once a promise is
made by an employer, then the employer must pay
all promised wages, including wage benefits, accruing
to its employees based on any policy, agreement
or practice that the employer has established. And
pursuant to N.C.G.S. 95-25.13(2) of the WHA, the
employer must: "Make available to its employees,
in writing or through a posted notice maintained
in a place accessible to its employees, employment
practices and policies with regard to promised wages."
And an employer must comply with its own wage payment
agreements until such time as the employer changes
its policy in writing in compliance with N.C.G.S.
95-25.13(3) of the WHA. Such reductions to earned
wages, including earned wage benefits, cannot be
made retroactive. In other words, the notification
of the reduction in promised wages cannot take away
pay or wage benefits that have already been earned
up to the date of the notification. Any reduction
in pay or wage benefits must be prospective from
the date of notification. Please review on-line
our fact sheet on Changes/Reduction
in Wages for more information.
Earned vacation pay,
commissions, and bonuses cannot be forfeited unless
the employer has a written forfeiture clause in
its vacation, commission, or bonus policy or termination
policy pursuant to N.C.G.S. 95-25.13(2) of the WHA.
Keep in mind that vacation pay, commissions, or
bonuses have to be earned, regardless if a verbal
promise or a written policy, before an employer
has to pay them at all. Also, even if there is a
written policy that has a written forfeiture clause,
an employee may still be due the earned vacation
pay, commissions, or bonuses at termination. It
all depends on the language of the forfeiture clause
and the reason/s the employee's employment was discontinued,
and if the reason/s meet the criteria in the written
forfeiture clause. Please note that the North Carolina
Department of Labor (NCDOL) takes the position that
sick leave does not have to be paid at termination
even if there is no written forfeiture clause unless
the policy actually states that sick leave will
be paid at termination or there is the practice
of such payments.
Also, pursuant to
the WHA, an employer can pick and choose what "promised
wages" it wants to pay and to which employee/s
it wants to pay the "promised wages" or
to which employee/s it wants to give "wage
benefits", and which employees it does not
want to give any "promised wages" or "wage
benefits" to at all.
Generally, an employer cannot discriminate
against its employees for reasons based on age, race, sex, religion, national
origin, color, disability [including the Americans with Disability Act (ADA)],
or pregnancy. For questions on discrimination based on these protected categories,
you need to contact the federal Equal Employment Opportunity Commission
(EEOC) at 1-800-669-4000 (toll-free). Web site: http://www.eeoc.gov.
For questions on employees being treated unfairly for reasons other than
the protected categories mentioned, you need to consult with a private attorney.
If you do not have an attorney or know of one to contact, you may call the
North Carolina Lawyer Referral Service at 919-677-8574 (Raleigh/Cary) or
toll-free (NC only) 1-800-662-7660. Web site: http://www.ncbar.org/legal_prof/probono/atj_Irs.asp.
If you cannot afford an attorney, you may be eligible for free legal advice
thru a Legal Aid Services office in your area. Contact their Central Office
in Raleigh at 919-856-2564 for information on local offices throughout the
State. Web site: http://www.lsnc.org.
It is also entirely
up to an employer to come up with its own criteria
as to how many hours an employee works a day or
week or any other factors that make an employee
part-time vs. full-time for that particular employer.
However, if wages or wage benefits are involved,
then the employer must clearly spell out in writing
(policy, handbook, etc.) as to what it takes to
be a full-time employee vs. being a part-time employee.
This is especially important if an employer's part-time
employees do not earn wage benefits (such as vacation
pay, sick leave, and holiday pay) while its full-time
employees can earn wage benefits. Also, it is legal
for an employer to switch an employee from full-time
to part-time even without the employee's knowledge
as long as the employee does not ends up losing
wages, including wage benefits, that have already
been earned at the time of the change-over.
Please note that the
NCDOL does not handle benefit issues such as pension
plans, retirement plans, 401(k) plans, IRAs, profit
sharing plans, and medical/health insurance including
COBRA. Here is the agency that you need to contact:
United States Department
of Labor
Employee Benefits Security Administration (EBSA)
61 Forsyth Street, S.W., Room 7B54
Atlanta, GA 30303
Telephone: (404) 562-2156
Web Site: http://www.dol.gov/ebsa
For all insurance
questions, you may also contact the North Carolina
Department of Insurance's Consumer Division at (919) 733-2032
(Raleigh) or toll-free 1-800-662-7777. Web site:
http://www.ncdoi.com
North Carolina 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
Web site: http://www.nclabor.com
