North Carolina Wage Payment | NC Laws On Wages

Frequency of Wage Payments

An employer must pay its employees on regularly scheduled paydays either daily, weekly, bi-weekly, semi-monthly, or monthly. Bonuses, commissions, or similar forms of wages may be paid as infrequently as once per year if the employee is notified in advance. NC Statute 95-25.6

Manner of Wage Payments

An employer may select any legal form of payment, so long as payment is made in full on the designated payday, subject to authorized deductions and legal withholdings. Acceptable forms of payment include:

cash
money order
negotiable checks
direct deposit
payroll card

NC Admin. Code 13-12.0309

Direct Deposit

North Carolina labor laws allow an employer to pay wages by direct deposit so long as the wages are deposited into an institution whose deposits are insured by the federal government or into a financial institution selected by the employee. Employers may require an employee to be paid by direct deposit if:

the employee is permitted to choose their own financial institution to which the wages will be deposited
the costs for direct deposit cannot result in the employee being paid lower than the minimum wage

NC Admin. Code 13-12.0309; NC Dept. of Labor – Payroll Card Payment and Direct Deposit

Payroll Card

North Carolina labor laws allow an employer may pay wages by payroll card so long as:

employee can withdraw all their wages owed on payday
there must be no cost to the employee to withdraw wages at least one-time each payday

Employers may required employees to be paid by payroll card.

NC Dept. of Labor – Payroll Card Payment and Direct Deposit

Payment upon Separation from Employment

An employer must pay an employee who has been separated from employment all wages due by the next regular payday. This rule applies regardless of whether the employee has voluntarily quit, been terminated or laid off, or quit due to a labor dispute.

An employee can request in writing that an employer pay their final paycheck by trackable mail. Commissions, bonuses, or other similar types of wages must be paid on the next regular payday after the employer is able to calculate the amount and must be paid to the employee unless the employer has timely notified the employee of any forfeiture policy. NC Statute 95-25.7

Wages in Dispute

If the amount of wages due is in dispute, the employer must timely pay the wages, or that part of the wages the employer concedes to be due, without condition. The employee retains all remedies the employee might otherwise be entitled to regarding any balance of wages claimed by the employee. Acceptance of a partial payment of wages by an employee does not constitute a release of the balance of the claim. Further, any release of the claim required by an employer as a condition of partial payment is void. North Carolina Stat. 95-25.7A

Deductions from Wages

An employer may withhold or deduct a portion of an employee’s wages for any of the following only after giving the employee written notice of the amount to be deducted seven (7) days prior to date of the deduction. An employer does not have to give an employee who has been separated from employment the seven (7) day notice.

cash shortages,
inventory shortages, or
loss or damage to property

An employer is not required to have written consent from an employee to deduct wages from an employees paycheck for a cash shortage, inventory shortage, or property damage if the employee has been arrested or criminal process has commenced against the employee as a result of the shortage or property damage. If the employee is not found guilty, the employer must return the deducted amount to the employee.

An employer may withhold or deduct any portion of an employee’s wages when:

the employer is permitted by state or federal law,
both the employer and employee are aware of the amount of the deduction and have agreed to it and the employee has given prior written consent which:
- is signed on or before the payday from which the deduction is to be made;
- indicates the reason for the deduction; and
- states the actual dollar amount or percentage of wages which shall be deducted from one or more paychecks. If the deduction is for the convenience of the employee, the employee must have a reasonable opportunity to withdraw consent.
if the employee does not know the amount of the deduction and has not agreed to it in advance, the employer must obtain written authorization from the employee which
- is signed on or before the payday from which the deduction is to be made; and
- indicates the reason for the deduction.
- Prior to any deduction, the employee must
  - receive advance written notice of the actual amount to be deducted;
  - receive written notice of their right to withdraw consent; and
  - be given a reasonable opportunity to withdraw the authorization in writing.

If the withholding or deduction is for the benefit of the employer (e.g., cash shortage, damage to or loss of property), the deduction cannot reduce the employee’s resulting wage rate below the minimum wage rate. If an employee works overtime during the effected period, the employer may reduce the wage rate for the employee’s regular hours to the minimum wage rate, however, the overtime rate cannot be reduced.

An employer does not have to have written authorization or give an employee notice of a deduction if the deduction is for purposes of correcting a prior overpayment of wages or repayment of a wage advance or a loan. An employer must have written consent from an employee to deduct interest, fees, and other charges associated with advances or loans.

NC Statute 95-25.8; NC Admin. Code 13-12 .0305

Uniforms, Tools, and Other Equipment Necessary for Employment

North Carolina does not have any laws prohibiting an employer from requiring an employee to purchase a uniform, tools, or other items necessary for employment.

Pre-hire Medical, Physical, or Drug Tests

North Carolina does not have any laws prohibiting an employer from requiring an applicant or employee to pay the cost of a medical examination or the cost of furnishing any records required by the employer as a condition of employment.

Notice of Wage Reduction

An employer must give an employee written notice of any reduction in the employee’s wage rate at least one (1) pay period prior to the change. North Carolina Stat. 95-25.13

Statement of Wages (Pay Stub)

An employer must furnish each employee with an itemized statement of all deductions, diversions, payments or withholding of wages for each pay period in which deductions or recoupments are made. NC Statute 95-25.13; NC Admin. Code 13-12.0304

Record Keeping Requirements

An employer must maintain complete and accurate records for a period of at least three (3) years which contain the following information for each employee in each workweek, unless the employee is specifically exempted:

full name;
home address, including zip code and phone number;
date of birth if under 20;
occupation in which employed or job title;
time of day and day of week the employee’s workweek begins (a group of employees working the same workweek may have one record keeping for the entire group);
regular rate of pay;
hours worked each workday;
total hours worked each workweek;
total straight time earnings each workweek;
total overtime earnings each workweek;
total additions to or deductions from wages;
total gross wages paid each pay period;
date of each payment;
tip credits;
costs of meals,
lodging or other facilities;
start and end time for youth under age 18;
youth employment certificates;
wage deductions;
vacation and sick leave policies;
policies and procedures relating to promised wages; and
any other records related to wages or hours.

NC Statute 95-25:15; NC Admin. Code 13-12.0801; NC Admin. Code 13-12.0802

Notice Requirements

North Carolina labor laws require employers to:

Notify its employees, orally or in writing at the time of hire, of the promised wage rate and the day and place for payment;
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
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

NC Statute 95-25:13