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1 Thank you for downloading Agent 77 s STATE EMPLOYMENT REGULATIONS FOR NORTH CAROLINA. This form is provided to you as is. As provided, we believe it meets the requirements needed for state compliance, as applicable, at the time you download it. Any substantive change to the contents of this document may result in potential legal liability for you and your company. Agent 77, Inc. accepts no liability or responsibility for any of our documents that have had the contents altered beyond simply filling in the appropriate blanks and/or replacing place holder text and adding your company logo and information. This document is provided to you with the understanding it is not a legal or accounting opinion and should not be construed as such, and that Agent 77, Inc. is not engaged in the business of rendering legal or accounting services. If you need specific advice on any legal or accounting issue, the services of a competent professional should be sought. Please see for more information. This and all documents downloaded from our website are Copyright 2005, 2006, 2007, 2008, 2013 Agent 77, Inc. Reminder: Agent 77 s license prohibits you from copying and distributing this STATE EMPLOYMENT REGULATIONS FOR NORTH CAROLINA to anyone outside of your company. Doing so is a violation of this license and will result in the revocation of your subscription and/or prosecution under federal copyright laws as well as possible civil litigation. Please see for a copy of the current license agreement. North_Carolina_Regs

2 What s New Youth under 18 employed by their parent, guardian, or other person standing in loco parentis are generally exempt from the provisions of North Carolina's child labor law (previously only parents were exempt) Employers who grant vacation time must now give all earned vacation time off or payment in lieu of time off unless clearly specified by company policy and posted The North Carolina minimum wage was raised to $6.15 per hour as of January 1, Tipped employees must be paid a minimum of $3.13 per hour New sections added on Emergency Services Leave, Domestic Violence Leave, Breastfeeding Rights, Drug Testing, Smoking in the Workplace and Job Reference Liability The North Carolina minimum wage was raised to $6.55 per hour as of July 24, 2008 following the federal minimum wage. Tipped employees must be paid a minimum of $2.13 per hour The North Carolina minimum wage was raised to $7.25 per hour as of July 24, 2009 following the federal minimum wage Changes were made to the following sections: Family Leave, Military Leave, Jury Duty, Job Reference Liability, Minimum Wage and Discrimination. The following section was added: New Hire Reporting Changes were made to the following section: State Continuation of Benefits Changes were made to the following section: New Hire Reporting. North_Carolina_Regs

3 Introduction Employment laws vary from state to state with some being more employee-friendly than others. Federal regulations set minimum standards of worker protections that all employers of a given size must meet. Individual states, however, are free to grant workers additional or expanded rights or protections above this federal minimum. Virtually all employers in the U.S. are subject to federal employment regulations. Only the smallest, strictly local employers are not subject to federal regulations. If an employer does any of the following, they are participating in interstate commerce and are subject to federal employment regulations: Production of goods for commerce, such as transportation or communication Use of mail over state lines Interstate communications using the telephone Use of the Internet over state lines Interstate communications using electronic mail Make purchases from out-of-state vendors Sell to customers in other states This summary of employment regulations does not include information for those few employers not subject to the federal minimum employment regulations. Many states have regulations for public employers that are different than those for employers in the private sector. This document also does not include information on regulations (federal and state) that apply only to public sector employers. In this document we summarize the workplace regulations and worker protections available in North Carolina. Although not an exhaustive list, it covers the major topics small to midsized employers must deal with on a regular basis. Covered areas include: Wage, hour and overtime rules (including child labor and break rules); Leaves of absence (family leaves, voting time and jury duty); Discrimination and harassment regulations; and State rules on continuation of benefits. The federally mandated, but state run new-hire reporting requirements are covered under a separate document, available for download from Libretto or from the Agent 77 store. The following Quick View table summarizes these regulations. This is followed by a more detailed description of these regulations. Please be sure to read both carefully to understand your responsibilities under North Carolina and federal law. Also, see the resources section below for reference websites and Libretto tools that can help you comply with these regulations. North_Carolina_Regs 1 of 9

4 QUICK VIEW OF STATE EMPLOYMENT REGULATIONS FOR NORTH CAROLINA Topic Minimum Wage Overtime Payment of Wages Work Hours and Breaks Child Labor Family Leave North Carolina Regulation $7.25 / hour Tipped employees may be paid a minimum of $2.13 Some localities have a higher minimum Subminimum wage applies in certain circumstances. Non-exempt employees must be paid at least 1.5 times their regular rate for hours worked over 40 in a given week Employees must be paid at least once per month Employers who grant vacation time must give all earned vacation time off or payment in lieu of time off unless clearly specified by company policy and posted Final paychecks must be delivered no later than the following payday North Carolina has no break time rules, except for minors. Employers employing minors under 18 must keep a youth employment certificate on file (issued by county Director of Social Services) Required 30-minute break for every 5 hours worked for minors 14 and 15 years of age Federal and North Carolina law prohibit minors in certain occupations. See the U.S. Department of Labor and the North Carolina Department of Labor for information on these prohibitions (contact information is in the reference section). See the details section below for restrictions on hours minors may work Children employed by their parent, guardian, or other person standing in loco parentis are generally exempt North Carolina's child labor law. Employees must provide 4 hours of unpaid leave in a given year for employees to attend school conferences or activities The federal Family Medical Leave Act (FMLA) requires employers with 50 or more employees to: o Grant up to 12 weeks of unpaid family medical leave to employees who have completed a year of service or 1250 hours o Leave must be granted for birth or adoption of a child, serious medical condition of the employee, to care for a family member with a serious medical condition. qualifying exigency for military leave and covered illness/injury of service member for leave. o Employee must be reinstated to same or equivalent position after completion of leave o Benefits must be maintained during leave North_Carolina_Regs 2 of 9

5 QUICK VIEW OF STATE EMPLOYMENT REGULATIONS FOR NORTH CAROLINA Jury Duty and Domestic Violence Leave Military Leave Voting Time Emergency Services Leave Breastfeeding Rights Drug Testing Job Reference Liability Smoking in the Workplace Leave is required, but is unpaid Employee must be reinstated to same position after completion of jury duty Victims of domestic violence must be granted leave (paid or unpaid) to attend court, get medical attention or receive other services necessary to remedy a domestic crisis North Carolina has no separate Military Leave law aside from the Federal Law outline below Employers must grant up to 5 years of military leave Employee must be reinstated to same or equivalent position after completion of military leave Employers may not terminate or threaten to terminate any employee called to military service Special benefit rules apply for military leave North Carolina has no voting time rules Employees who are volunteer firefighters, rescue squad members or emergency medical responders must be given unpaid leave when called into emergency service by the state. Mothers must be allowed to breastfeed their child in any place that they otherwise are allowed to be. Employers are not required to provide any special time off or location for this. Employers may implement a random drug testing program conforming to state regulations. Employers who give out information about current or former employees job history or performance are protected from civil suit by the former employee, unless the information given is knowingly false. North Carolina prohibits smoking in buildings owned or operated by the state or any political subdivision as well as museums, libraries, schools and health care facilities. Other businesses may institute a smoking ban if they so desire. For exceptions, see below. New Hire Reporting Discrimination and Harassment Employers are required to report certain information about new hires/rehires within 20 days of hire/rehire. Certain employers are required to use E-Verify. North Carolina prohibits employers from discriminating based on national origin, race or color, religion, age, physical or mental disability, service in the military service, genetic testing results, sickle-cell trait, Hemoglobin C, AIDS or related diseases, having filed a complaint against illegal activity, sex (including sexual harassment, pregnancy, childbirth, and other pregnancy-related conditions), or use of tobacco during non-work hours. North_Carolina_Regs 3 of 9

6 QUICK VIEW OF STATE EMPLOYMENT REGULATIONS FOR NORTH CAROLINA Continuation of Benefits Details and contact information are listed below. North_Carolina_Regs 4 of 9

7 Wage, Hour and Overtime Rules Employers are subject to the federal minimum wage, hour and overtime rules through the Fair Labor Standards Act. This act specifies that businesses that do at least $500,000 in gross revenue, as well as all health care facilities and schools are subject to the federal rules. Also, employers involved in interstate commerce are subject to the federal rules. Minimum Wage North Carolina minimum wage is $7.25 per hour. Employers may pay tipped employees a minimum of $2.13 per hour, provided that the total wages plus tips come to at least the minimum of $7.25 per hour. Be aware that certain local governments in North Carolina have a higher minimum wage for employees in their jurisdictions. Be sure to contact your city or county government to see if there are any local minimum wage rules for your business. Employers may pay a wage rate not less than 85% of the minimum applicable wage rate for up to 52 weeks to persons who have been unemployed for at least 15 weeks and who are economically disadvantaged, or who are, or whose families are, receiving Work First Family Assistance or supplemental social security benefits. Finally, both federal and North Carolina regulations allow employers to apply for licenses to pay sub-minimum wages to certain disabled persons. Please contact the U.S. Department of Labor or the North Carolina Department of Labor for more information on applying for these licenses. (Contact information for both are listed in the reference section below.) Overtime North Carolina has the same overtime rules as the federal government. That is, for any hours worked over 40 in a given week, non-exempt employees must be paid at least one and one-half times their regular pay. Like the federal rules North Carolina exempts certain employees from minimum wage and overtime rules. Excluded employee classes include: executive, administrative, professional, outside salespeople and computer professionals. (Use Libretto s FLSA Resource Package for help in determining whether a given employee is exempt). North Carolina also permits exemptions for certain small employers not involved in interstate commerce. See the North Carolina Department of Labor web site for a list of these exemptions. Payment of Wages North Carolina law requires that employees be paid at least monthly. These regular pay periods must be established and published for all employees. Employers who grant vacation time must give all earned vacation time off or payment in lieu of time off unless clearly specified by company policy, notified to all employees and posted. Deductions from the final paycheck may not be made without the employee's written consent, unless required by law. Employers may not require employees to be paid electronically. Work Hours and Breaks North Carolina has no break time rules, except for minors (see below). North_Carolina_Regs 5 of 9

8 Child Labor North Carolina child labor law requires all employers employing minors under the age of 18 to have youth employment certificates on file (issued by county Director of Social Services). Both federal and North Carolina law prohibits minors from working in hazardous or certain other occupations. Please contact the U.S. Department of Labor or the North Carolina Department of Labor for more information on restricted occupations for minor employees. Minors less than 16 years of age are subject to the following strict limits for hours worked per day and per week: 1. When school is in session, children 14 and 15 years of age may NOT work: During school hours, unless employment is part of a vocational training program; More than 3 hours per day, and More than 18 hours per week. 2. When school is NOT in session (including summer vacations and holidays), children under the age of 16 may NOT work. More than 8 hours per day; nor More than 40 hours per week. 3. Daily hours of work may not be before 7:00 AM or after 7:00 PM except between June 1st and Labor Day when working hours may be extended to 9:00 PM. In addition, minors 16 and 17 years of age who have not graduated from high school may NOT work before 5:00 AM or after 11:00 PM on any day preceding a school day. North Carolina law also requires that any minor 14 and 15 years of age working 5 or more continuous hours in a day be given a 30-minute break. Note: Youth under 18 years of age employed by their parent, guardian, or other person standing in loco parentis are generally exempt from the provisions of North Carolina's child labor law. Leaves of Absence Family Leave Employers must offer employees who are the parent or guardian of a school-age child the opportunity to take up to 4 hours of unpaid leave in a given year to attend school conferences or activities. This time must be scheduled at least 48 hours in advance, and employers may require written verification from the school that the employee actually attended the conference or activity. Employers with 50 or more employees must grant up to 12 weeks of unpaid family medical leave to employees who have completed a year of service or 1250 hours. This leave must be granted for the birth or adoption of a child, serious medical condition of the employee, to care for a family member with a serious medical condition, qualifying exigency for military leave and covered illness/injury of service member for leave. After completion of the leave the employee must be reinstated to the same or an equivalent position (as regards to salary, benefits and seniority). Also, benefits, such as health care coverage and retirement benefits, must be maintained during leave. North_Carolina_Regs 6 of 9

9 Jury Duty and Domestic Violence Leave Employers must provide leave for jury duty, but need not pay for the leave. Also, employers may not terminate or threaten to terminate any employee called to jury duty, and employees must be restored to their position within the company as if they had been on furlough. Employees who are covered by FLSA exemptions must be paid their full salary (minus jury duty stipend) or risk losing their exemption status. Employees who are victims of domestic violence must be granted leave (paid or unpaid) to attend court, obtain medical treatment for himself or herself, or to obtain other services necessary to remedy a crisis of domestic violence. Employees must follow the employer s standard leave procedures including advance notification unless emergencies prevent it. Employers may not terminate or threaten to terminate any employee who takes this leave. Military Leave Federal law provides that employees must be granted up to 5 years of military leave and must be restored to their position (or an equivalent position) within the company as if they had been on furlough. Also, employers may not terminate or threaten to terminate any employee called to military service. North Carolina law prohibits employers from requiring employees using any accrued vacation or other leave when called to active duty in the National Guard. Please see Libretto s White Paper on USERRA for more details on military leave. North Carolina provides that members of the North Carolina National Guard are entitled to take leave without pay when called into service and reinstatement rights apply under certain conditions. Voting Time North Carolina has no voting time leave provisions. Emergency Services Leave Employees who are volunteer firefighters, rescue squad members or emergency medical responders must be granted unpaid leave to respond to an emergency after the Governor or General Assembly has declared a state of disaster. Employees may not be terminated, threatened with termination, suspended, demoted or otherwise penalized for being absent from work when responding to such a emergency call. Employees may not be required to use accrued vacation or other leave when responding to such a disaster. Other Employment Regulations Breastfeeding Rights Under North Carolina law mothers may not be prohibited from breastfeeding their child in any location where they are otherwise authorized to be. However, employers are not required to provide any special time off or place for breastfeeding or expressing of breast milk. Drug Testing Employers may require a pre-employment drug test or implement a random drug testing of employees, provided that: samples are collected in a reasonable and sanitary manner and in such a way as to prevent substitution; all samples with a positive result are retested and a portion of the sample preserved for at least 90 days; the tests are conducted by a certified lab; the employee or perspective employee has the right to have the sample retested again; North_Carolina_Regs 7 of 9

10 and that the employee or perspective employee be given a notification of their rights under the North Carolina Controlled Substance Examination Regulation Act. Job Reference Liability Employers who give out information about current or former employees job history or performance, are protected from civil suit by the former employee, unless the information can be shown to be false and the disclosing employer knows (or should have known) it to be false. Employers cannot attempt to conspire to prevent a discharged employee from obtaining employment with any other employer. However, a former employer may supply a truthful, written reason for the discharge upon request of an employer with whom the discharged employee has applied for employment. Smoking in the Workplace North Carolina prohibits smoking in buildings owned or operated by the state or any political subdivision as well as museums, libraries, schools (except for teacher s lounges) and health care facilities. In addition, private businesses may designate areas as non-smoking provided that at least 20% of the interior space of equal quality is designated as a smoking area. New Hire Reporting Employers are required to report the following information for new hires/rehires, to the state, within 20 days on form W-4 or through the state's website: Employee's name, address, SSN, first day of work and the employer's name, FEIN and state UC number. Employees rehired after being off the payroll for 60 consecutive dates are considered new hires. Employers with more than 25 employees are required to use the federal employment verification system (E-Verify) to ensure that their new hires are legally entitled to work in the United States. The law does not apply to individuals whose term of employment is less than nine (9) months in a calendar year. Discrimination and Harassment North Carolina prohibits discrimination or harassment based on: National origin Race or color Religion Age Mental or physical disability Service in the armed forces Genetic testing results Sickle-cell trait Hemoglobin C AIDS or related diseases Having filed a complaint against illegal activity Sex (including sexual harassment, pregnancy, childbirth, and other pregnancyrelated conditions), or North_Carolina_Regs 8 of 9

11 Smoking during non-work hours Employers who have 15 or more employees are also covered by GINA which prohibits discrimination based on genetic testing. Sexual orientation are prohibited in certain cities. Whistleblowing is protected. North Carolina has several employment-related posting requirements which can be obtained from the state labor agencies. State Continuation of Benefits Benefits change frequently. Currently, continuation coverage requirements apply to employer-sponsored group health plans that do not meet federal COBRA requirements. Eligible employees have the right to continue coverage for up to 18 months. The link below will provide further information about state law: Resources/Posters North Carolina Department of Labor United States Department of Labor North Carolina New Hire Reporting Related Libretto Products FLSA Resource Package (for help in determining overtime exempt / non-exempt status of employees) Overtime Guidelines Break Period Guidelines Family Medical Leave of Absence Policy Military Leave of Absence Policy Jury Duty-Witness Leave Policy Voting Time Policy Drug & Alcohol Testing Policy & Release Forms Guidelines on Smoking In the Workplace Guidelines on Verification of Employment and Providing References Prohibited Harassment and Nondiscrimination Policy & Employee Acknowledgement COBRA Continuation Coverage Policy General Notice of COBRA Continuation Coverage Rights COBRA Continuation Coverage Election Information. Notice And Form North_Carolina_Regs 9 of 9

12 New Hire Reporting for North Carolina North_Carolina_Regs 10 of 9