Unpaid Wages Under the North Carolina Wage and Hour Act

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 in a variety of ways. If you are working in North Carolina, you should be aware of the various laws, especially related to unpaid bonuses, commissions, vacation pay, or other wages owed. 

Wages and bonuses

North Carolina law requires employers to pay employees wages at least once per month. However, employers can also compensate their workers with bonuses, commissions, or other wage payments as infrequently as annually. If an employer promises wages (benefits, vacation pay, sick pay, jury duty pay, holiday pay, etc.), 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 may reduce 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 an employee already 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 wages upon termination

Even when terminating an employee, the employer still owes his or her remaining wages. Unpaid bonuses, commissions, vacation or other payments (excluding hourly rates or salaried amounts) must be paid on the next payday. 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 are not eligible for forfeiture unless the employer has pre-established policies regarding forfeiture.

Unlike sick leave, employers must pay commissions or bonuses after an employee’s termination unless there is a written forfeiture provision. If a forfeiture provision contains a lot of ambiguity, the ruling generally falls in favor of the employee.

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, an employer owes you $15,000 in earned vacation pay, you could recover up to $30,000. Our firm accepts unpaid wage claims on a contingency basis so you don’t owe attorneys’ fees unless we recover damages.

North Carolina Unpaid Wages Attorney

Awaiting unpaid wages? Contact Maginnis Howard by phone at (919) 526-0450 or by email at info@maginnishoward.com to schedule a consultation. There is no obligation to hire us, we are happy to discuss your initial options at no cost to you.

Maginnis Howard is a Raleigh firm handling employment cases dealing with unpaid wages and overtime throughout Wake and surrounding counties. The firm takes wage and hour/overtime cases throughout North Carolina, particularly when those involving groups of workers. Contact the firm to discuss your overtime claim today or submit a confidential new case inquiry here.