Navigating overtime laws can quickly become tricky. Understanding these laws is crucial for both employers and employees in North Carolina. Therefore, this guide outlines the North Carolina overtime laws, helping you know your rights and responsibilities so you can obtain the compensation you deserve for the time you worked.
Overtime Law Summary for North Carolina
Overtime laws ensure that employees receive fair compensation for extra hours worked. In North Carolina, these laws are in place to protect workers from being exploited. In addition, they require employers to pay employees one and a half times their regular pay rate for any hours worked over 40 in a workweek.
According to the North Carolina Department of Labor, employers must pay employees 1.5 times their regular hourly rate for any hours worked over 40 in a single workweek. Without a doubt, overtime and minimum wage calculations are based on the total hours worked each week, not the daily hours that you work each day.
North Carolina currently sets the minimum wage at $7.25 per hour. If an employee works more than 40 hours in a week, the employer must pay the extra hours at a rate of $10.88 per hour.
Also, private-sector employers cannot offer compensatory time off to non-exempt employees instead of overtime pay.
Non-exempt employees must receive 1.5 times their regular pay for overtime hours. Furthermore, being on a salary does not automatically mean an employee is exempt from overtime; the employer must determine whether the employee meets the criteria for a salaried-exempt position before withholding overtime pay.
Who Is Eligible?
Not all employees can obtain overtime pay. The Fair Labor Standards Act (FLSA) sets specific criteria to determine eligibility. Generally, non-exempt employees, such as hourly workers, qualify for overtime. On the other hand, exempt employees, like certain salaried professionals, may not be eligible.
Non-Exempt Employees
Non-exempt employees can obtain overtime pay. In addition, these workers typically earn an hourly wage and include roles such as:
Administrative assistants
Retail workers
Manual laborers
Customer service representatives
Exempt Employees
Exempt employees are not entitled to overtime pay. These positions usually include higher-level roles that meet specific criteria, such as:
Executive, administrative, or professional employees
Outside sales employees
Certain computer professionals
Exempt employees earn over $684 per week and engage in supervisory, managerial, and non-manual labor tasks.
Calculating Overtime Pay
Calculating overtime pay is straightforward. If you work more than 40 hours in a workweek, you should receive 1.5 times your regular hourly rate for the extra hours.
For example, if your regular pay rate is $10 per hour and you work 45 hours in a week, your overtime pay calculation would be:
Regular pay for 40 hours: 40 x $10 = $400
Overtime pay for 5 hours: 5 x $15 (1.5 times $10) = $75
Total pay for the week: $400 + $75 = $475
Overtime for Tipped Employees
In North Carolina, employers must pay tipped employees at least $2.13 an hour, provided they make up the difference between the tip credit and the minimum wage. Consequently, tipped employees should still receive a minimum of $7.25 per hour.
When calculating overtime pay, employers must base the 1.5 overtime rate on the tipped employee’s regular pay rate. Remember, this rate includes the cash wage and the tip credit, which together must equal $7.25 per hour. Importantly, employers can take credit for a portion of the tips toward their payment of the minimum wage.
For example, if a tipped employee earns the minimum cash wage of $2.13 an hour and receives $15 an hour in tips, their overtime calculation would be as follows:
First, calculate the regular pay for 40 hours:
Regular Pay: 40 hours x $7.25 = $290
Next, determine the overtime rate for the extra 20 hours worked beyond the 40-hour workweek:
Overtime Rate: 20 hours x $10.88 = $217.60
Since the employer can take a credit for a portion of the tips, from the $15 per hour in tips, they take a credit of $5.12 per hour. Furthermore, given the employee worked a total of 60 hours, the calculation for the tip credit is:
Tip Credit: 60 hours x $5.12 per hour = $307.20
Therefore, the gross pay is:
Gross Pay: $290 (regular pay) + $217.60 (overtime pay) = $507.60
After deducting the tip credit, the employer pays:
Final Payment: $507.60 – $307.20 = $200.40
Thus, the employer is required to pay $200.40 to the tipped employee for that week.
Employer Responsibilities
Employers in North Carolina must adhere to overtime laws. They must track hours accurately and ensure eligible employees receive the correct overtime pay. Also, failure to comply can result in legal consequences, including fines and back-pay orders.
Accurate record-keeping is vital. Employers should maintain detailed records of hours worked, pay rates, and overtime calculations. Undoubtedly, this documentation helps resolve disputes and ensures compliance with state and federal laws.
Properly classifying employees as exempt or non-exempt is crucial. Misclassification can lead to significant legal issues. Therefore, employers should regularly review job duties and salary levels to ensure correct classification.
Steps to Take if You Believe You Are Owed Overtime Pay
If you believe you are owed back overtime pay, it’s important to act quickly.
Follow these steps:
Document Your Hours: You’ll want to keep very detailed records of your work hours and any communications with your employer about overtime.
Review Your Job Classification: Always ensure that you understand your job classification (exempt vs. non-exempt).
Contact Your Employer: If you are concerned about overtime pay then discuss your concerns with your employer or HR department.
File a Complaint: If you discuss your concerns with your employer but they still do not resolve the issue then you’ll need to contact the North Carolina Department of Labor or seek legal assistance.
Consult an Attorney: Seek legal advice from an employment attorney specializing in wage and hour laws.
Penalties for Non-Compliance
Non-compliance with overtime laws can result in severe penalties for employers.
These can include:
Back pay for unpaid overtime
Fines and penalties imposed by labor authorities
Legal fees and court costs if the case goes to trial
Statute of Limitations in North Carolina
In North Carolina, you must file legal actions to recover unpaid overtime wages within two years. However, if the employer is proven to have willfully violated the law, the statute of limitations extends to three years.
For instance, consider a dispute between an employee and employer over unpaid overtime wages from three years ago. Therefore, the court would likely dismiss the claim if the employee waited more than two years to file.
As an employee in North Carolina, you have the right to claim unpaid overtime compensation. Therefore, it is crucial to act promptly to ensure the full value of the overtime wage theft claim is recovered.
Get Legal Assistance
If you believe your employer has violated overtime laws and not given you overtime pay, contact Lemberg Law for assistance. Our experienced legal team will evaluate your case for free. Call us at 475-277-2200 or complete our online form to get started.
About the Author:
Sergei Lemberg is an attorney focusing on consumer law, class actions related to automotive issues, and personal injury litigation. With nearly two decades of experience, his areas of practice include Lemon Law (vehicle defects), Debt Collection Harassment, TCPA (illegal robocalls and texts), Fair Credit Reporting Act, Overtime claims, Personal Injury cases, and Class Actions.
He has consistently been recognized as the nation's "most active consumer attorney." In 2020, Mr. Lemberg represented Noah Duguid before the United States Supreme Court in the landmark case Duguid v. Facebook. He is also the author of "Defanging Debt Collectors," a guide that empowers consumers to fight back against debt collectors and prevail, as well as "Lemon Law 101: The Laws That Lemon Dealers Don't Want You to Know."
