Overtime Pay Laws in North Carolina

In North Carolina, as the Department of Labor governs, employees are generally entitled to overtime pay when they work more than 40 hours in a single workweek. Overtime pay is typically calculated at one and a half times the employee’s regular pay rate.

How Is Overtime Calculated If I Receive Tips?

If you’re a tipped employee in North Carolina, your employer can take a “tip credit” against your regular pay rate. However, the employer cannot take this credit against the overtime portion of your pay for overtime purposes. This means that when calculating overtime pay for tipped employees, the employer must first determine the full minimum wage rate (without any tip credit) and then pay one and a half times that rate for each hour worked beyond 40 in a week, minus any tip credits applied to the base pay.

Let’s break it down with an example:

• The federal minimum wage is $7.25 per hour.
• The tip credit allowed in North Carolina is $5.12
• An employee, John, works as a waiter and receives tips. He works 45 hours in a given week.

Regular Pay Calculation

For the first 40 hours, John is paid a direct wage of ($7.25 – $5.12) = $2.13 per hour. 40 hours × $2.13/hour = $85.20

Overtime Pay Calculation

• The full minimum wage is taken for overtime calculation, which is $7.25.
• The overtime rate would be 1.5 times the full minimum wage: $7.25 × 1.5 = $10.88 per hour.
• Now, for the 5 hours of overtime, John would be paid 5 hours × $10.88/hour = $54.40

But wait, we’re not done. Since John’s regular rate (because of the tip credit) is $2.13 per hour, you deduct the tip credit from the overtime pay.

The difference between the full minimum and the reduced wage (because of the tip credit) is $7.25 – $2.13 = $5.12.

This $5.12 is the tip credit we’ve discussed. This gets multiplied by 1.5 for overtime, which is $5.12 × 1.5 = $7.68.

Now, subtract this from the overtime rate: $10.88 – $7.68 = $3.20.

For the 5 overtime hours, considering the tip credit, John earns 5 hours × $3.20/hour = $16.00.

Total Weekly Pay

Combine regular and overtime pay: $85.20 (from the first 40 hours) + $16.00 (from the 5 overtime hours) = $101.20.

In this example, John’s total pay for the week, before tips, would be $101.20.

Are There Any Jobs Exempt from Overtime Pay?

Certain jobs are exempt from the overtime provisions as detailed by the Department of Labor. Common exemptions include certain salaried executive, administrative, professional, and outside sales employees. It’s important to understand the specific criteria for each exemption to determine whether it applies to a particular job.

Let’s dive into each exemption with example jobs.

Executive Exemption

The employee’s primary duty must be managing the enterprise or managing a customarily recognized department or subdivision of the enterprise. They must regularly direct the work of at least two or more other full-time employees or their equivalent and have the authority to hire or fire other employees, or their suggestions and recommendations for hiring, firing, advancement, etc., must be given particular weight.

Example Jobs

• A store manager who oversees all operations and supervises employees.
• Vice president of a company who helps steer the company’s direction and oversees various departments.

Administrative Exemption

The primary duty must be performing office or non-manual work related to the employer or customers’ management or general business operations. The employee’s primary duty includes the exercise of discretion and independent judgment concerning matters of significance.

Example Jobs

• Human resources manager who sets company policies.
• A financial advisor or consultant who provides strategy and advice based on independent judgment.
• Marketing directors who craft company strategies.

Professional Exemption

The primary duty of the employee must be the performance of work requiring advanced knowledge, defined as work that is predominantly intellectual and includes work requiring the consistent exercise of discretion and judgment. This “advanced knowledge” is generally in a field of science or learning and is typically acquired by a prolonged course of specialized intellectual instruction.

Example Jobs

• Lawyers or attorneys.
• Registered nurses or doctors.
• Architects or engineers.
• Professors or educators with advanced degrees.

Outside Sales Exemption

The employee’s primary duty must be making sales or obtaining orders or contracts for services or facilities for which the client or customer will pay a consideration. The employee must be customarily and regularly engaged away from the employer’s place or places of business.

Example Jobs

• Sales representatives who travel to client sites.
• A business development professional who meets potential clients at conferences or other locations outside the office.

It’s important to note that simply having a specific job title does not determine exempt status. The employee’s duties, responsibilities, and salary play crucial roles in determining whether an exemption applies. If there’s a question about an employee’s exemption status, it’s recommended to consult legal counsel or review the specific criteria set by the Department of Labor. If you have questions about North Carolina labor laws, speak to a lawyer.

Does North Carolina Have a Daily Overtime Limit?

North Carolina does not have a daily overtime limit. The state’s overtime laws focus on the number of hours worked in a single workweek. This means employees in North Carolina are eligible for overtime pay only when they exceed 40 hours in a workweek, regardless of how many hours they work in a single day.

How Do I File an Overtime Claim in North Carolina?

If you believe you’ve been denied overtime pay to which you’re entitled, you can file a complaint with the North Carolina Department of Labor’s Wage and Hour Bureau. Gathering all relevant documentation, such as pay stubs, hours worked, and any communication with your employer regarding the issue, is crucial. Alternatively, you can pursue an overtime lawsuit if your rights have been violated.

Filing an Overtime Claim in North Carolina

• Collect all pertinent documents: pay stubs, records of hours worked, and employer communications.
• Contact the North Carolina Department of Labor’s Wage and Hour Bureau to file a complaint.
• Follow the Bureau’s guidance on submitting evidence and any required forms.
• If unsatisfied with the outcome, consider initiating an overtime lawsuit.
• Seek advice from an employment attorney to guide you through the legal process.

Can My Employer Force Me to Work Overtime?

Generally, employers in North Carolina can require employees to work overtime. However, they must compensate eligible employees at the appropriate overtime rate. There is no specific provision regarding “forced overtime,” but any time worked over 40 hours a week must be compensated at the overtime rate unless exempt.

Should I Seek Legal Help?

If you believe your overtime rights have been violated, it may be in your best interest to consult with an experienced employment attorney. Understanding the intricacies of overtime lawsuits and the full scope of North Carolina overtime laws can be challenging.

LegalMatch can connect you with a knowledgeable North Carolina employment lawyer to help ensure your rights are protected. Don’t wait; find the legal help you need today.