labor lawAdivision of labor law center

On July 24, 2008, when the federal minimum wage rose from $5.85 per hour to $6.55 per hour, North Carolina ‘s minimum wage increased by 40 cents from $6.15 per hour to match the federal minimum of $6.55. That’s because under state law, when the federal minimum wage is higher, the North Carolina rate increases to match it.

On July 24, 2009, the North Carolina minimum wage will rise again to match the federal minimum wage increase from $6.55 per hour to $7.25 per hour.

Overtime in North Carolina is enforced by the North Carolina Department of Labor. Companies must pay overtime at a rate of 1.5 times the usual hourly rate for any time over 40 hours in one workweek. Not all employees, though, are eligible for overtime pay, such as salaried employees and managers.

To understand which salaried employees are eligible and which are exempt, the U. S. Department of Labor provides guidelines in CFR 541. The North Carolina Department of Labor adopted these guidelines on the state level.

North Carolina overtime is calculated by the number of hours worked during the workweek, not the pay period. For instance, a worker gets paid every two weeks, and works 45 hours one week, and 35 hours the second week. That employee is eligible for 5 hours overtime based on the 45 hours worked in one week. It would be illegal for an employer to determine that the worker was not entitled to overtime because she worked only 80 hours during the two-week pay period.

Instead of paying overtime, government agencies may offer employees “comp time.” If a government employee puts in 45 hours in one week, that worker could be paid in time off instead of wages at the rate of 1.5 x the number of hours over 40. Instead of receiving extra wages, that employee could take 7.5 hours of paid time off at a future date.

North Carolina law, however, does not allow companies in the private sector to offer comp time instead of overtime pay. Nor can many non-profit organizations utilize comp time, even if the employee would prefer the additional time off. Only government agencies can use this benefit.

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