Introduction to employment laws in North Carolina
While there aren’t too many state laws governing employment relationships in North Carolina, many federal employment laws apply. Compliance with North Carolina employment laws isn’t just a legal obligation; failure to comply with these laws can result in penalties, lawsuits, or even business closure.
In this guide, we’ll help you to stay compliant while hiring and manage employees in North Carolina.
Employing in North Carolina: Key employment laws and practices
Standard work hours
In North Carolina, what is considered full-time employment varies but is generally understood to be between 30 to 40 hours per week. While there’s no legal definition for full-time employment at the state level, it’s essential that employers understand this benchmark as it can impact aspects such as benefits eligibility.
Work hours for contractual workers or self-employed professionals may differ significantly based on the nature of the contract or industry norms. Businesses usually define work hours in employment contracts to prevent misunderstandings later on.
Minimum wage and overtime
In North Carolina, the minimum wage is $7.25 per hour, which is the federal rate for private-sector employees. This rate remains constant across industries, providing fair compensation for workers regardless of their sector.
When it comes to overtime, North Carolina follows the guidelines set by the federal Fair Labor Standards Act (FLSA). Non-exempt employees, or those who earn less than $684 per week, are entitled to 1.5 times their regular pay rate if they work over 40 hours in a week.
Insurance and benefits
Employers in North Carolina must comply with both federal and state regulations when it comes to providing insurance and other benefits to their employees. This includes coverage under FICA Social Security and Medicare, as well as unemployment insurance which is determined at both state and federal levels.
Additional benefits such as health, dental, and vision insurance, along with retirement plans like 401k, are often provided by employers, though not mandated by the state.
Benefit type | Employer contribution |
FICA Social Security | 6.20% |
FICA Medicare | 1.45% |
Unemployment insurance (State) | 0.06% – 5.76% |
Unemployment insurance (Federal) | 0.60% – 6.00% |
Workers’ Compensation insurance | Varies |
Multiplier makes it easy to manage benefits for North Carolina employees.
Meal and rest periods
North Carolina employment laws do not specifically mandate employers to provide rest or meal breaks to employees who are 16 years or older. This means that an employer is not obligated by law to give an employee relief periods or lunch breaks, regardless of the number of hours worked.
While there’s no state law requiring meal or rest breaks for adults, it’s worth noting that federal laws do have some stipulations. The Fair Labor Standards Act (FLSA) requires employers to pay for short rest breaks (usually five-20 minutes). However, meal breaks that last at least 30 minutes can be unpaid.
Anti-discriminations laws
North Carolina has several laws that prohibit employment discrimination.
The Equal Employment Practices Act (EEPA) prohibits discrimination based on race, religion, color, national origin, age, sex, and disability. The Retaliatory Employment Discrimination Act (REDA) protects employees from retaliation for taking actions under various state laws.
In addition to the protections under federal law, North Carolina also prohibits discrimination based on military status, lawful use of products while off-duty, AIDS/HIV status, and sickle cell or hemoglobin C trait.
These laws generally apply to employers with 15 or more employees, with some exceptions. Employees who believe they have been discriminated against can file a complaint with the North Carolina Department of Labor’s Employment Discrimination Bureau.
Leave policies
North Carolina requires employers to provide certain types of leave, such as holiday leave for public employees, sick leave, family and medical leave, and military leave. However, private-sector employers in North Carolina are not required by law to provide other types of leave, such as vacation leave, bereavement leave, or voting leave.
Leave type | Eligibility | Duration |
Sick leave | Full-time permanent, probationary, and time-limited employees | Eight hours per month (96 hours annually) |
Family and medical leave | Eligible employees of employers with 50+ employees | Up to 12 weeks per 12-month period |
Military leave | Members of North Carolina National Guard or US military forces | Unpaid, with reinstatement rights |
Domestic violence leave | All employees | Reasonable time to obtain protective order |
Parental involvement in school | All employees | Up to four hours per year |
Easily onboard employees in North Carolina?
Termination laws
North Carolina follows an “at-will” employment policy, which means that either party can terminate the employment relationship without notice or cause, unless stated otherwise in an employment contract or collective bargaining agreement.
Employers must ensure that termination does not occur on discriminatory grounds or violate any federal laws such as the Federal Worker Adjustment and Retraining Notification Act (WARN).
In cases of mass dismissal, employers are required by the WARN Act to provide 60 days’ notice to impacted employees. Severance pay is not mandated by law but may be offered at the employer’s discretion or as stipulated in the employment contract.
In terms of unused vacation pay at the time of termination, the policies are typically outlined by the employer or within employment contracts. There’s no specific requirement for notice period in North Carolina, but it’s generally accepted practice to provide at least two weeks’ notice.
Safety and health
Worker safety and health are vital aspects of North Carolina HR compliance. The North Carolina Occupational Safety and Health (NCOSH) Division is responsible for enforcing occupational safety and health standards in the workplace.
Should a work-related illness or injury result in hospitalization, amputation, the loss of an eye, or fatality, employers must report the incident to NCOSH within 24 hours of learning about it.
Specific safety regulations may also apply based on the industry. Industries like construction or manufacturing may have additional safety guidelines compared to office work environments. Employers should proactively engage with NCOSH resources and experts to ensure full safety compliance.
Taxes in North Carolina
In North Carolina, there are several taxes that both employers and employees need to be aware of. These include federal income tax, state income tax, Social Security, Medicare, and unemployment insurance Tax.
Federal Income Tax varies based on the employee’s income level, with rates ranging from 10% to 37%. North Carolina levies a flat State Income Tax rate of 4.5%. The Social Security Tax rate is 6.20%, capped at an annual salary of $168,000, and the Medicare Tax rate is 1.45% for all employees.
Unemployment insurance tax, a state-level tax, ranges from 0.06% to 5.76% on the first $31,400 of an employee’s earnings. For new employers, a flat rate of 1% applies.
|
Tax type |
Employer contribution |
Employee contribution |
|
Federal income tax |
N/A |
Varies |
|
State income tax |
N/A |
flat, 4.5% |
|
Social Security |
6.2% (max. $168,000) |
6.2% (max. $168,000) |
|
Medicare |
1.45% |
1.45% |
|
Unemployment insurance tax |
0.06%-5.76% (max. $31,400) |
N/A |
Managing North Carolina employees with an Employer of Record (EOR)
Ensuring HR compliance in North Carolina can be a complex task, but with the right tools, businesses can navigate these laws with ease.
Multiplier’s Employer of Record (EOR) solution is a valuable tool for businesses aiming to hire workers in North Carolina. Our comprehensive platform enables businesses to legally employ workers without setting up local entities – a process that is both time-consuming and potentially fraught with legal complications.
Our Global Payroll platform, meanwhile, allows employers to pay their employees on time while handling local taxes, contributions, and withholdings. This ensures that your business remains in compliance with North Carolina’s specific tax and payroll laws.
Book a demo with Multiplier to see how we can streamline your HR and compliance processes.
FAQs
Full-time employment in North Carolina is typically considered to be between 30 and 40 hours per week. However, the state does not have a legal definition for full-time employment.
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay of 1.5 times their regular pay rate if they work more than 40 hours in a week. In North Carolina, the salary threshold for overtime exemption is $684 per week.
The minimum wage for private sector employees in North Carolina is currently $7.25 per hour, in line with federal regulations. However, certain cities and counties may have higher minimum wage rates.
North Carolina does not have state statutes governing vacation time, but employers typically offer paid or unpaid leave. Public holidays are not mandatory paid days off, but employers commonly allow workers to take federal holidays as paid days off. The Family and Medical Leave Act (FMLA) grants eligible employees up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons.
North Carolina follows “at will” employment, meaning either party can terminate the employment relationship without notice. However, in cases of mass dismissals, the Worker Adjustment and Retraining Notification Act (WARN Act) requires employers to give 60 days’ notice to impacted employees. Severance pay is not mandated by law but may be offered by employers.
