Employment in NC

What are my rights as an employee?
Most North Carolina employers do not offer employment contracts. Employers have historically had the right to fire employees at will unless there was a written contract which protected against it or the firing was for an impermissible reason as established by state or federal law (for example, discrimination). Generally, where there is no definite period of time stated in either an oral or written agreement, it is terminable at will by either party, with or without cause. Provided there is an employment contract, an employee may seek civil damage from an employer for wrongful discharge. However, the wrongfully discharged employee has a duty to minimize his damages by seeking alternative employment, and will be entitled to recover only the difference between the compensation agreed to for the full term of the contract and the amount earned at the time of the discharge. Some courts are interpreting office policy manuals as giving rise to contractual obligations. However, if you want specific rights regarding the employment term and termination requirements, get the agreement in writing, signed by the employer or his agent.

Federal law prohibits discrimination based on sex, race, color, religion, national origin and handicap. Many state and local laws also forbid such discrimination and many extend the protections to include discrimination based on sexual preference. The Equal Employment Opportunity Commission located at 1309 Annapolis Drive, Raleigh, North Carolina 27608-2129, (919) 856-4064 or 1-800-669-4000, is the Federal agency established to handle complaints of discrimination.

The following steps should be followed:

  1. Request complaint form.
  2. File within 180 days of the action about which you are complaining. (This may be extended to 300 days if the charge also is covered by a state or local anti-discrimination law).
  3. EEO Specialist will assist you with filing the complaint.
  4. After investigation, if settlement is not reached, EEOC will make a decision on whether there is reasonable cause to believe discrimination occurred.
  5. If yes, EEOC will give you a “right to sue letter” which permits you to initiate a private suit and which must be done within 90 days.

Sexual Harassment
Sexual harassment constitutes unlawful discrimination on the basis of sex. Sexual harassment is a violation of federal law, state law, and university policy. Reports of violations can be made to the Equal Employment Opportunity Commission, 1309 Annapolis Drive, Raleigh, North Carolina 27608-2129, (919) 856-4064 or 1-800-669-4000, or the Sexual Harassment Coordinator, Student Affairs Division, UNC-Chapel Hill, (919) 966-4042. Sexual harassment is an unlawful employment practice and includes unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature when:

  1. submission to such conduct is made explicitly or implicitly a term or condition of an individual’s employment or academic standing; or
  2. submission to or rejection of such conduct by an individual is used as the basis for employment or academic decisions affecting that individual, or;
  3. such conduct has the purpose or effect of unreasonably interfering with an individual’s work or academic performance, or creating an intimidating, hostile or offensive environment.

Employers and/or the University must take immediate and appropriate investigative and corrective action where they know or should have known such conduct was taking place. Students are encouraged to attempt to resolve the matter with the administrative official most directly concerned, excluding the person accused of sexual harassment. Sexual harassment by a student of another student is a violation of the Instrument of Student Judicial Governance and complaints against fellow students should be referred to the Office of the Dean of Students.

Minimum Wages (State And Federal Law)
The State minimum wage is currently set at Seven Dollars and Twenty Five Cents ($7.25) per hour and there are numerous exceptions to that wage. Tips earned by a tipped employee may be counted as wages only up to fifty (50) percent of the minimum wage provided the employee is notified in advance and is permitted to retain all tips. The employer is required to maintain accurate records. Full-time students, learners, apprentices and messengers can be paid 90% of the Federal minimum wage. The chronically unemployed can be paid 85% of the Federal minimum wage, as can employees of seasonal religious assemblies, seasonal amusement or recreational establishments. The following types of employment are exempted altogether: agriculture, domestics, pages in the N.C. General Assembly, volunteers, prisoners, confined mental patients, models, actors, performers, fishermen, near relatives of the employer, any employees of a business that does not have three or more employees, computer programmers, and software engineers.

All hours worked in excess of 40 hours in any workweek must be paid overtime compensation at one and one-half time of the regular rate.(Exceptions: seasonal amusement or recreational establishment employees, which rate overtime after 45 hours). The law does not require lunch hours or break time for workers over 16 years of age.

There are new federal overtime rules in place as of August 2004, although their implementation has been delayed by Congress at this time. The revamped regulations are easy to comprehend if your yearly income is roughly under $23,000, or if you take home more than $100,000 a year. For middle-income workers, however, the application of the rules is complicated.

The basic idea behind the federal law (the Fair Labor Standards Act) holds that workers in so-called “white collar” jobs can, under certain instances, earn extra pay for workweeks that exceed 40 hours. One of the most significant changes is the mandate that employers pay overtime to employees earning less than $455 a week or $23,660 annually. Under the prior law, employers had to pay overtime to employees earning less than $155 per week or $8,060 annually.

The new regulations reiterate that the exemptions from overtime only apply to white collar and not to manual laborers or other blue collar workers who perform work involving repetitive operations with their hands, physical skill and energy. Some of the FLSA-covered, non-management employees identified as blue collar in the new regulations and, therefore, unquestionably guaranteed overtime pay status — are: carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers. These employees are not exempt from overtime pay requirements even if they are highly paid.

There are three tests to determine whether “white collar” jobs get overtime: a “salary-basis” test, a “salary-level” test, and a “duties” test. To be exempt from overtime, workers must be paid a set salary, not an hourly wage. This has long been the rule under federal overtime law. The new rules don’t change this requirement. In order to be exempt from overtime, the new rules require that employees earn a minimum salary of $455 a week, or $23,660 a year. That’s triple the prior minimum salary of $155 a week, or $8,060 a year. White-collar employees who earn more than $100,000 a year are automatically exempt from overtime pay under the new law.

The third test is where the rules get considerably more complicated — and controversial. The final prong is called the “duties” test. It tries to establish eligibility based on the type of work an employee performs every day. Generally, a worker whose job is deemed “administrative,” “professional,” or “executive” in nature does not qualify for overtime.

The new rules aim to clarify the type of work that qualifies as administrative, professional and executive. For example, under the executive exemption, a fast food manager must be involved in key staffing decisions like hiring, firing and promoting in order to be deemed ineligible for overtime. Previously, that manager had to have the actual power to hire and fire employees in order to be considered exempt.

Who’s considered a “professional”? According to the Department of Labor, which issued the new guidelines, a professional can’t get overtime if she has a job that is “primarily intellectual” and requires “discretion and judgment.”

These include “learned” professionals such as lawyers, doctors, registered nurses and engineers. But technicians, beauticians, licensed practical nurses, and other “skilled tradespeople” are owed time-and-a-half. So too are firefighters, police sergeants and other emergency personnel deemed to be “first responders.”

The issue of federal overtime pay standards is not only complicated, but politically controversial. The final shape of the rules will depend on further Congressional action.

Right To Be Paid
Employees who have been discontinued for any reason must be paid all wages on or before the next regular payday. Wages on bonuses or commissions must be paid on the first regular payday after the amount becomes calculable when separation occurs. Employers are required to itemize all deductions made from wages for the state and federal government and may not withhold any other deductions unless there is a written authorization from the employee. However, an employer may deduct cash shortages, inventory shortages or damages to his property provided he gives notice seven days prior to payday. If an employer provides vacation pay as a company practice or policy, he must provide that pay.

The N.C. Department of Labor’s Wage and Hour Division, 919-807-2796 or 1-800-NC-LABOR, will investigate complaints regarding minimum wage, overtime and payment of wages. Employees may also file a private civil action against the employer for violations of the Wage and Hour Act and, if successful, can recover attorney’s fees. All lawsuits must be brought within two years. The law prohibits firing employees for filing complaints with the State.

Unemployment Benefits
Unemployed workers are entitled to a weekly benefit for a limited time after they are involuntarily unemployed. Benefits are a matter of right and are not based on need. To be eligible one must: (1) be able to work, (2) be available for work, (3) be actively looking for work, and (4) not be on vacation. A worker is disqualified if: (1) he left work voluntarily without good cause attributable to the employer, or (2) if he was discharged for misconduct or substantial fault on his part connected with the work. Benefits are denied if a worker refuses to apply for suitable work when so directed or accept suitable work when offered, or attend vocational school. To file an unemployment claim you should contact the nearest office. In Orange County: Unemployment Insurance Division, Employment Security Commission of North Carolina, 601 Valley Forge Road, Hillsborough, NC, (919) 644-1051.

Access To Personnel Files
There is no Federal law that requires employers to allow employees access to examine their own personnel files. However, if the employee sues the employer, he may require the employer to produce the personnel file. All employees of the State of North Carolina are given the right to examine their personnel file and seek removal of material that is inaccurate or misleading.

Worker’s Compensation For Injuries
Workers who are injured as the result of an accident on the job or who contract occupational disease may receive compensation for their injuries. All employers in which three or more employees are regularly employed in the same business or establishment are required to provide coverage. The amount of monetary compensation awarded to the injured worker depends on the type of injury and on his actual wage loss. The employer is required to offer “necessary medical attention” and prosthetic appliances within statutory limits. The employee must accept the medical attention offered. If an employee protests the amount of the award or the denial of an award, he may recover attorney’s fees and related physician’s fees. Employees are required to give the employer written notice of the accident within 30 days of the accident on a claim form issued by the North Carolina Industrial Commission. The actual claim must be filed within two years of the accident or is forever barred.

Occupational Safety And Health
This law is designed to ensure safe and healthful working conditions. Employers are required to provide a workplace free from recognized hazards that are causing or likely to cause death or serious physical harm. Pursuant to OSHA regulations, employees have the right to:

  1. request that OSHA conduct an inspection if they believe hazardous conditions exist in their workplace.
  2. refuse in good faith to expose themselves to hazardous conditions if there is no reasonable alternative (danger must be a real danger of death or serious injury and there not be enough time to do away with the danger through the complaint process).
  3. talk to the OSHA inspector.
  4. review employer information about job-related accidents and injuries at the workplace.
  5. participate in establishing standards.
  6. be advised by employer of hazards that exist and of possible exposure to toxic or dangerous materials;
  7. be notified of any citations issued against the employer.

Complaints should be directed to:

NC Department of Labor

Division of Occupational Safety & Health

Complaint Desk

313 Chapanoke Road, Suite 10

Raleigh, NC 27603

Fax: 919/773-2949

Bankruptcy’s Effect On Your Wages
If the company you work for goes bankrupt, the claim of its employees for payment of back wages takes precedence over the rights of all its other unsecured creditors. If a business is dissolved through a bankruptcy proceeding, the U.S. Bankruptcy Court requires that a detailed list of the firm’s assets, liabilities and creditors be filed with the petition. A trustee is appointed and he collects assets, sells them, and distributes the proceeds among the creditors (including employee-creditors) usually paying them a certain number of cents on each dollar owed them. If your employer suddenly locks the doors of his business and you are unable to contact him, you should contact the Bankruptcy Court in your area (North Carolina is divided into three districts) and ask whether he has filed for bankruptcy. If so, request a proof of claim from the Court and file your claim for back wages.

Verified June 2011


From the Bureau of Consumer Protection, “Background Checks: What Employers Need to Know.”

From the Federal Trade Commission, “Background Checks: What Job Applicants and Employees Should Know”