North Carolina Minimum Wage Increase

The North Carolina minimum wage will increase on July 24, 2009. Many states in the country, including Texas, Oklahoma, South Dakota and Indiana, increase their minimum wage to coincide with the federal minimum wage. North Carolina is one of these states.

On July 24, 2009, the federal minimum wage will increase by 70 cents from $6.55 to $7.25.

In 2007, the North Carolina minimum wage was $6.15 per hour. State law, however, requires that if the federal minimum wage is higher, the state must raise its minimum to match the federal rate. So, on July 24, 2008, when the federal minimum rose from $5.85 to $6.55, North Carolina increased its minimum by 40 cents per hour to match the federal rate.

That means the North Carolina minimum wage will also increase on that date, rising by 70 cents per hour from $6.55 to $7.25 per hour.

Under North Carolina state law, employers must pay the majority of employees overtime (1.5 times the usual hourly rate) for any time worked in excess of 40 hours in one payroll week. Salaried employees and managers, however, may be exempt.

According to the North Carolina Department of Labor overtime pay is based on the number of hours in the payroll week. North Carolina does not require companies to pay overtime based on the length of the workday, or the number of days worked in a week.

For example, a company’s pay period is two weeks or 80 hours. An employee puts in 45 hours the first week and 35 hours the second, totaling 80 hours. The North Carolina employer must pay the worker for 5 hours of overtime for the first payroll week.

North Carolina employers in the private sector and in most non-profit organizations are prohibited from offering compensatory time instead of overtime pay. Even if the worker is willing to accept comp time, it is illegal.

Only government agencies may offer comp time. Comp time follows the same calculation rules: 1.5 times the usual hourly rate. If a government employee works 2 hours of overtime, he or she is entitled to 3 hours of comp time for future use.