In many ways, the North Carolina Wage and Hour Act mirrors federal wage laws, including the Fair Labor Standards Act. The North Carolina Wage and Hour Act provides increased protection for employees across the state. However, not everyone is familiar with the law. It’s important to know your rights when it comes to unpaid bonuses or other lost wages in North Carolina.
North Carolina Employment Law
North Carolina requires employers to pay their employees wages at least once per month. However, you can be compensated with bonuses, commissions, or other wage payments as infrequently as annually. If an employer promises these wages, it must be paid pursuant to a written policy. Whether to provide amounts in excess of minimum wage and overtime is up to your employer. There are no mandatory requirements other than minimum wage and overtime payments
However, if an employer promises to pay you additional amounts in excess of minimum wage (and overtime after 40 hours per week), such as bonuses or commissions, it must pay those promised wages according to its policy. Employers are allowed to reduce your wages and bonuses any time, as long as the employer follows three rules:
- Pursuant to N.C. Gen. Stat. § 95-25.13, the employer must “notify employees, in writing or through a posted notice maintained in a place accessible to its employees, at least 24 hours prior to any changes in promised wages.”
- The employer cannot make any changes to your wages that are retroactive. This means an employer cannot take away wages or benefits that have already been earned.
- The employer cannot reduce your pay such that the employee earns less than the minimum wage amount of $7.25/hour per hour and less than overtime at time-and-one-half of an employee’s regular rate.
Unpaid Bonuses and Termination
When an employee is terminated, your wages must be paid on the regularly scheduled payday. Unpaid bonuses, commissions, vacation pay or other payments (other than hourly rates or salaried amounts) must be paid on the next payday after the amount owed becomes calculable. If an employer has a policy in place that requires an employee to forfeit bonuses or commissions, the employee losing such bonuses or commissions must be notified prior to any forfeiture or reduction, otherwise the amount is owed.
An employer can create its own policies and procedures governing an employee’s wages and benefits. The employer must clearly explain in writing what constitutes a forfeiture. Earned vacation pay, commissions, and bonuses cannot be forfeited unless the employer has a written explanation of how vacation pay, commissions, or bonuses can be lost. Unlike sick leave, commissions or bonuses must be paid following the termination of an employee. Only if the employee signed a clear, written forfeiture provision, can this be overridden. Ambiguous provisions are construed in favor of an employee and against an employer.
Costs of Unpaid Wages
Similar to unpaid overtime and minimum wage violations, an employee with unpaid bonuses, commissions, vacation pay, or other wages may recover double damages and attorneys’ fees from the employer. For example, if your employer owes $15,000 in vacation pay, you may potentially recover up to $30,000, plus attorneys’ fees.
If an employee disputes the amount of wages paid, an employer can only withhold the disputed amount. The employer can never withhold the entire paycheck. An employer must pay any amount agreed to be due on the regularly scheduled pay period. An employee who cashes a check is not relinquishing their rights to sue for any disputed amounts.
Maginnis Howard generally takes unpaid wage claims on a contingency basis so you are not responsible for attorneys’ fees unless you successfully recover from the employer. We cannot guarantee results but on many occasions we have secured a settlement or judgment that covers all of our attorney fees while allowing the employee to get all unpaid bonuses, commissions, vacation pay or other payments owed to them.
Representation for Unpaid Bonuses in North Carolina
Determining whether you have a claim for unpaid compensation requires an intensive inquiry into the employer’s pay practices. If you are wrongly denied vacation pay, bonuses, commissions, sick-leave, or any other wages from your employer, contact Raleigh unpaid wage and overtime lawyer Karl S. Gwaltney at 919.526.0450 for a free consultation regarding your rights. Maginnis Howard is a Raleigh firm handling employment cases dealing with unpaid wages and overtime throughout North Carolina. Contact us by phone at (919) 526-0450 or through our contact page.