USA – NORTH CAROLINA Law and Practice Contributed by: Phillip Strach, Alyssa Riggins, Nathaniel Pencook and Cassie Holt, Nelson Mullins Riley & Scarborough LLP
Nelson Mullins Riley & Scarborough LLP 301 Hillsborough St Suite 1400 Raleigh NC 27603 USA
Tel: +1 919 329 3800 Fax: +1 919 329 3799
Email: info@nelsonmullins.com Web: www.nelsonmullins.com
1. Employment Terms 1.1 Employee Status
1.3 Working Hours Under North Carolina law, there are no limitations to how many hours adults can work in a working week. However, as mentioned in 1.1 Employee Status , all non-exempt employees must be paid overtime (one- and-a-half times their hourly rate) for any time more than 40 hours per week. Youth employees may only work a maximum of 18 hours during the school week when school is in session. Youth employees must also be given a rest break of at least 30 minutes after five consecutive hours of work. Flexible work arrange - ments are allowed. While there is no employment law defining full-time versus part-time employment, Internal Revenue Service (IRS) regulations require that full-time employees work – on average – at least 20 hours per week or 130 hours per month. 1.4 Compensation The North Carolina and federal minimum wage is USD7.25 per hour. An injunction issued on 15 Novem - ber 2024 prevented the new salary threshold for exempt salaried employees from going into effect. At this time, this means that in order to be considered an exempt salaried employee, the employee in question must meet one of the duty exceptions outlined in 1.1 Employee Status and be paid at least USD35,568 (the previous threshold) per year. Otherwise, employees will need to be paid overtime for any hours exceeding 40 hours per week. Any earned but unpaid commis - sions or bonuses will need to be paid out upon termi - nation, unless the employer has an advance written policy notifying employees that any earned commis - sion or bonus will be forfeited upon termination.
Under the Fair Labor Standards Act (FLSA) and the North Carolina Wage and Hour Act (NCWHA), employ - ees are either exempt or non-exempt. An employee’s classification by default is “non-exempt” – meaning that if the employee works more than 40 hours per week (or, in some industries, exceeds the hours in an approved 8/80 schedule), the employee is entitled to overtime pay at a rate of one-and-a-half times their hourly rate. However, there are several exceptions to this for learned professionals, highly compensated executives, computer professionals, some creative positions and administrative positions. Employees who are exempt can be paid a salary – provided the salary meets the minimum threshold – and are not eligible for overtime. Misclassification of employees as exempt when they should be non- exempt can result in fines, back pay, additional puni - tive damages in the form of treble or double damages, and attorney’s fees. 1.2 Employment Contracts Employment contracts are not required in North Caro - lina. In fact, in the absence of a contract for a defi - nite period of time, all North Carolina employees are employed “at will”. If employers enter into contracts with employees they must be: • in writing; • signed; and • for a definite period of time.
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