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North Carolina Employment and Labor Laws

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Labor laws in North Carolina can be tricky to navigate if you’re unfamiliar with local employment laws. Labor laws greatly favor employers over employees, so knowing your rights is essential before starting a new job or leaving one. North Carolina is an at-will employment state, which means an employer can treat its employees as it sees fit unless there’s a specific law to protect employees or an explicit employment contract. Though it might not be pleasant, an employer is entirely within their legal right to assign an employee “demeaning” tasks and terminate an employee for any reason, including no reason at all. 

However, North Carolina's at-will employment doctrine has several recognized exceptions, and, like any area of law, there is a great deal of gray area. If an employer discharges a worker under these exceptions, the employer may be vulnerable to a lawsuit. Employees may be able to collect compensation such as back pay, front pay, punitive damages, reimbursement for attorney fees, and reasonable accommodations through these types of claims. Additionally, employees may be reinstated to their former jobs. If you feel like your termination or employment conditions were a result of discrimination, consult a private attorney to determine the next steps.

It is important to note that this article is intended as a general guide to North Carolina's employment and labor laws. Employers must comply with the law (whether local, state, or federal) that offers the greatest rights or benefits to the employee.

Fair Employment Practices

In North Carolina, employers with 15 or more employees are prohibited under the Equal Employment Practices Act and the North Carolina Persons with Disabilities Protection Act from discriminating against and harassing individuals based on protected classes, such as:

  • Sex (including pregnancy)
    Handicap or disability 

  • Age 

  • Religion 

  • National Origin 

  • Race 

  • Color 

Although more than 4% of the American workforce identifies as LGBTQ+, North Carolina doesn’t have a statewide law that protects gender identity, and sexual orientation isn’t protected classes under employment law. While 71% support LGBTQ+ protections and some local governments and private employers have adopted broader non-discrimination protections, the coverage is incomplete. 

E-Verify

North Carolina employers with 25 and over employees are required to use E-Verify to confirm new hires are authorized to work. Employers are only required to use E-Verify for those individuals if the employment term is nine months in a calendar year. The E-Verify law only applies to newly hired employees and includes anyone rehired by a company. For more information about the E-Verify process and stipulations, go here

Negligent Hiring Practices

North Carolina has specific requirements for employers recruiting and hiring new workers. For example, employers are prohibited from asking individuals about expunged criminal convictions, charges, or arrests on a job application, during an interview, or “otherwise.” 

Employers are also mandated to follow specific procedural requirements when job applicants are asked to submit to a drug test. When requiring potential employees to submit to a controlled substance examination, employers must use an approved laboratory to conduct testing, confirm a positive result, and allow applicants to be retested. 

Work Hours

North Carolina doesn’t have a limit on how many hours an adult employee, aka someone 18 years old or above, can work. There’s also no wage law that mandates breaks for employees 16 years of age or older. When scheduling, it’s up to an employer’s discretion to adjust an employee’s hours regardless of what the employees are scheduled to work. This rule is particularly relevant to non-exempt employees who work more than forty hours a week.  You should know that it’s completely legal for an employer to adjust an employee’s hours to avoid paying overtime. Employers are also free to require flexible scheduling as a condition of employment.  

Large corporations and small family businesses follow the same rules. An adult employee may be required to work unlimited hours, whether salaried-exempt or non-exempt. Employers are only required to pay time-and-one-half overtime based on an employee’s regular rate of pay for all hours worked in excess of 40 in a workweek to their non-exempt employees. Once again, employers don’t have a limit on the number of regular or overtime hours, shifts, or days an adult employee may be required to work. Employers can make working overtime mandatory and terminate an employee who refuses to work overtime, regardless of the amount the employee has already worked. 

Though it’s potentially discriminatory, an employer isn’t required to inform employees ahead of time about working extra hours and, under North Carolina law, doesn’t have to factor in an employee’s personal life. Employers can make employees work on their scheduled days off. Employers determine the length of an employee’s shift as well—whether they work eight-hour shifts, 12-hour shifts, or 16-hour shifts is up to an employer’s discretion. 

Employers aren’t required to give employees over 16 years old rest or meal breaks. There’s no legal requirement for employees to provide a breakroom or a smoke break, though it may be a good idea for morale. To learn more about breaks as an employee in North Carolina, you can find more information here.

Promised Wages & Wage Benefits

Under North Carolina law, employers must pay employees at least the minimum wage, which is currently $7.25 an hour, under North Carolina and federal labor laws. Being paid a salary does not exempt an employee from being paid minimum wage or overtime requirements. Employers aren’t required to provide mandatory wage benefits, such as vacation pay, sick leave, jury duty pay, or holiday pay, no matter how many hours a week they work. The giving or not giving of promised wages, such as wage benefits, is an employer’s decision. Wage benefits can be vacation pay, including PTO and PDO, sick leave, jury duty, and holiday pay. However, once an employer promises wage benefits, they must pay all promised wages according to their policy, agreement, or established practice. 

According to North Carolina wage laws, employers 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.” An employer must notify employees in writing if it decides to alter its wage payment policies. Any reductions to wages or benefits can’t be applied retroactively, meaning an employer can’t reduce your pay on any wages earned up to the notification date. 

Commissions, bonuses, and vacation pay must be earned, but determining whether an employer must pay them post-termination can be difficult. In North Carolina, Employers aren’t required to pay out benefits after termination unless the employment contract explicitly states this policy. Earned vacation pay, commissions, and bonuses can’t be forfeited unless an employer has a specific forfeiture clause. However, even with a written forfeiture clause, an employee may still be owed the earned pay upon termination. Whether or not an employer is required to pay out is largely dependent on the clause’s language and the reason for termination. Be advised the North Carolina Department of Labor (NCDOL) takes the position that sick leave doesn’t have to be paid at termination unless there’s a pre-established practice of doing so. 

Health Care Continuation Coverage

North Carolina has a State Continuation law that allows terminated employees and members to continue coverage under their employer’s group health plan when they lose their eligibility under the plan or terminate employment. Employees who terminate employment for any reason, whose hours are reduced, or who lose eligibility status may continue their basic health insurance coverage for up to 18 months. Unlike the federal COBRA laws, North Carolina’s State Continuation laws will not extend coverage beyond 18 months under any circumstances. 

Parental School Leave

No federal law requires employers to provide time off for parents to attend school activities. But many states, such as North Carolina, have begun to implement parental school leave as a mandatory employer benefit. In North Carolina, employers must grant four hours per year to any employee who is a parent, guardian, or person standing in loco parentis of a school-aged child so that the employee can attend school events and be involved at their child’s school. However, any leave that falls under parental leave is subject to specific conditions. For example, the employer and employee must agree on when the leave will take place. Employers can also stipulate that employees provide the request in writing at least 48 hours before the scheduled leave and may, under North Carolina law, ask for written verification from the child’s school that the employee was involved at the school during the time of the leave.  

Public Policy Exemption

A public policy exemption prohibits companies from terminating employees when doing so goes against an established public policy of the state. For example, a company cannot fire an employee on the grounds that they refused to do something illegal. Likewise, injured employees in North Carolina are permitted to collect workers’ compensation benefits. Therefore, employers are not permitted to fire a worker because they file a workers’ compensation claim or accept these types of benefits. The public policy exception is narrow and generally requires that the policy be stated in a North Carolina statute but if an employer violates public policy, the general terms of at-will employment will not protect the employer from potential liability.

Retaliation

In addition to unlawful termination, North Carolina wage law prohibits acts of retaliation, including suspending, demoting, relocating, or cutting workers’ wages. Under these laws, employers are not permitted to fire workers or retaliate against them for taking part in discrimination hearings or otherwise avowing their legal rights. Punishing employees for participating in these activities, including testifying in court or taking other actions to end discriminatory practices, is illegal.

North Carolina also has laws in place that prohibit retaliation against workers for the following reasons:

  • Reporting employers’ activities under the Control of Potential Drug Paraphernalia Products Act

  • Filing a wage complaint

  • Being the victim of domestic or workplace violence

Additionally, state law prevents employers from denying reemployment or retention of employment to workers based on their service in the North Carolina National Guard.

What Are the Penalties for Unlawful Termination in North Carolina?

Failure to abide by the North Carolina Wage and Hour Act and the FLSA can result in a lawsuit where employers are liable for unpaid wages, interest, and liquidated damages. Under North Carolina law, you have a legal right to continue working, free from retaliation, even if you file a lawsuit against your current employer. Specific penalties for employers vary greatly depending on the specifics of the case. 

How Much Can Someone Sue an Employer in North Carolina?

To sue an employer for wrongful termination, you’ll need evidence that supports your termination violated a specific law or the terms of a contract. A wrongful termination settlement can provide compensation for a variety of losses, including lost wages, wage disparities, a gap in job benefits, emotional distress, and out-of-pocket expenses. Each case is unique, however, and there is no average settlement for wrongful termination. Settlements for cases can range from $5K to even millions of dollars, depending on the factors that led to the termination. If you experience harassment or discrimination, you may be entitled to a larger settlement. 

The Statute of Limitations in North Carolina

A claim of employment discrimination must be filed within 180 days of the date of the alleged discrimination. To file a claim, you’ll need to contact your local Equal Employment Opportunity Commission (EEOC) office. You can also find more information about filing an EEOC by visiting this page. EEOC launched an online service in 2016 that enables folks to check the status of their current discrimination charge online. This service has a portal to upload and receive documents along with the ability to communicate directly with the EEOC, which speeds up the transmitting period. It’s recommended that you consult an attorney before filing your claim. However, having representation to file your claim with the appropriate state and federal agencies isn't required.

Resources for Employees in North Carolina

After you’ve determined the validity of your claim, the next best step is to speak with a well-versed attorney about their case. A lawyer will be able to provide a more concrete timeline for the lawsuit process and estimate a potential award specific to the circumstances of your case. However, if you’re eager to start the process, there are many ways you can begin the documentation process without representation. If you’re pregnant or believe your termination was a result of pregnancy, there are relevant resources online to prepare your claim. 

File a Complaint with EEOC

If you believe your termination resulted from a violation of regulations due to discrimination, you can file a complaint with the Equal Employment Opportunity Commission (EEOC). The EEOC is the organization in charge of upholding anti-discrimination laws, and you can file claims due to discrimination based on race, color, religion, sex, national origin, age, disability, genetic information, or retaliation. To learn more about the process of filing a formal complaint, go to their website and speak to an EEO Counselor. The EEO Counselor will interview and counsel you through the complaint process, but be mindful of the 15-day deadline for filing a formal complaint that begins after your final interview with your counselor. 

Legal Aid of North Carolina

If attorney fees are an economic barrier to pursuing a lawsuit, then the Legal Aid of North Carolina can help. The Legal Aid of North Carolina provides legal services and can help individuals recover illegally denied unemployment benefits and advise folks on their wage claims. 

Unemployment Benefits

You’re still eligible to collect employment even if you've been fired. In most cases, you can file for unemployment as long as the reason for your termination doesn’t qualify as “misconduct.” If you were laid off or terminated due to a lack of skill, you are still eligible for unemployment benefits. 

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