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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 $7.25 an hour. 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
 

 

 

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