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Wage Disputes Under the Wage and Hour Act

The North Carolina Wage and Hour Act is an important civil statute for business owners and employees to have some basic understanding of; as the penalties associated with violating it are fierce. Business owners who violate the Wage and Hour Act subject themselves to double damages – if they can’t show a good faith failure to pay wages properly – plus interest, plus the worker’s attorney fees, and can be exposed to personal liability. There are many employment laws in North Carolina which favor the employers, but those dealing with wages do not.

The Act does not just apply to workers who are paid on an hourly basis. Under the law, wages include sick pay, vacation pay, severance pay, commissions, bonuses, and “other amounts promised when the employer has a policy or practice of making such payments.” All of these must be paid as promised in order to avoid liability exposure.
When an employee is terminated, be careful about bonuses, commissions or other “extras” which the employee might have been eligible for. Those wages must be paid on the first regular payday after the amount becomes calculable and cannot be forfeited unless the employee has been notified in advance in writing of the policy or practice which results in such forfeiture.

Withholding wages to offset monies “owed” to the company is also risky. In order to withhold wages, the employer will need written authorization on or before the payday indicating the reason for the deduction and stating the actual dollar amount or percentage that will be withheld. Employees, if you have not been paid, if the basis for a pay decrease has not been noticed to you in writing, you may have a potential claim under this act.

The key for business owners is to understand, in advance, what you can and cannot do. Craft your policies and procedures to avoid these problems with employees down the line. If you are in a wage dispute, contact Maginnis Law, PLLC to schedule a consultation with an experienced business attorney. Maginnis Law, PLLC is a Raleigh civil litigation law firm that handles cases in Cary, Apex, Wake Forest, and the rest of the Research Triangle area. Contact the firm at 919.526.0450 to speak with a Raleigh civil lawyer or visit our website at