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Hiring

Advertising
What are the requirements relating to advertising open positions?

North Carolina has no statutory requirements applicable to private employers regarding advertising for open positions, but employers should be aware of Fourth Circuit case law holding that failure to advertise open positions could merit relief under Title VII of the Civil Rights Act of 1964 if there is proof of a systematic practice causing artificial, arbitrary, and unnecessary barriers for minorities, which bear a causal relationship to the plaintiff’s inability to gain employment (Thomas v. Washington County School Bd., 915 F.2d 922 (4th Cir. 1990)).

North Carolina has legislation governing the posting of jobs by a “job listing service.” A “job listing service” is defined as a business operated for profit, which publishes vacant positions with any employer other than itself and which charges fees to applicants for its services and which does not perform any activities of a private personnel service other than publishing job listings (N.C. Gen. Stat. § 95-47.19). A job listing service is prohibited from publishing or causing to be published “any information which it knows or reasonably ought to know is false or deceptive or which it has no reasonable basis for believing to be true” (N.C. Gen. Stat. § 95-47.26). A job listing service is also prohibited from:

  • publishing false information;
  • posting vacancies for a business where workers are on strike or lockout, unless the applicant is informed about this in the publication;
  • posting vacancies for an employer engaged in “unlawful or immoral” activity;
  • posting vacancies about an employer in which the listing service has a 10% or greater financial interest; or
  • posting vacancies about an employer that the listing service knows or has reason to know is in financial or other difficulty likely to lead to imminent cessation (N.C. Gen. Stat. § 95-47.28).

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

No state legislation restricting background checks or inquiries into criminal records and arrests exists. Employers must comply with the Federal Fair Credit Reporting Act. Employers are prohibited from making applicants pay the cost of obtaining criminal records as a condition of hiring (N.C. Gen. Stat. § 14-357.1).

(b) Medical history

No state legislation restricting inquiries into medical history exists. However, employers should be aware that it is unlawful for any employer with 25 or more employees to require any applicant to pay the cost of a medical examination or the cost of providing any records required by the employer as a condition of hire (N.C. Gen. Stat. § 14-357.1). The North Carolina Department of Labor takes the position that such records are not just medical records, but also any required records including, but not limited to, criminal records. Any employer that violates this section may be fined. It is the North Carolina Department of Labor’s position that Section 14-357.1 does not apply where the medical examination or records are required by law, rather than by the employer.

(c) Drug screening

Employers are permitted to conduct drug screenings of prospective employees pursuant to, and in compliance with, the Controlled Substance Examination Regulation Act (N.C. Gen. Stat. § 95-230, et seq.) and the related regulations codified in 13 NCAC .0400, et seq., which include the following:

  • At the time of providing a sample for testing, the prospective employee must be provided with written notice of his or her rights and responsibilities under the act.
  • A preliminary screening procedure that uses a single-use test device may be used for prospective employees.
  • Samples for prospective or current employees may be collected onsite or at an approved laboratory.
  • If a screening test for a prospective employee produces a positive result, an approved laboratory shall confirm that result by a second examination of the sample, using gas chromatography with mass spectrometry or an equivalent scientifically accepted method, unless the prospective employee signs a written waiver at the time or after he or she receives the preliminary test result.
  • Applicants and employees have a right to retest a confirmed positive sample at the same or another approved laboratory.
  • A retest must be requested in writing, specifying to which approved laboratory the sample is to be sent.
  • The applicant or employee is responsible for all reasonable expenses for chain of custody procedures, shipping, and retesting of positive samples related to this request.
  • Employers are prohibited from imposing the costs of drug screening tests as a condition of hiring (N.C. Gen. Stat. § 14-357.1).

In addition, the Occupational Safety and Health Administration ”has issued a final rule which impacts drug testing in every state, and it is clear in the commentary to the final rule that blanket post accident or injury testing is prohibited.

(d) Credit checks

No state legislation restricting background checks or inquiries into credit histories for hiring purposes exists.

(e) Immigration status

No state legislation restricting background checks or inquiries into immigration status exists. Employers with 25 or more employees are required to use E-Verify for all new hires (N.C. Gen Stat. § 64-25, et seq.).

(f) Social media

No state legislation restricting the use of social media in background checks or inquiries for employment purposes exists.

(g) Other

There is limited statutory immunity for employers that disclose truthful information about a current or former employee’s job history or job performance to a prospective employer. This immunity does not apply when the information disclosed by the employer was false and the employer knew or reasonably should have known that the information was false (N.C. Gen. Stat. § 1-539.12). North Carolina also has a blacklisting law prohibiting employers from preventing or attempting to prevent a discharged employee from obtaining employment (N.C. Gen. Stat. § 14-355).

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?

The North Carolina Wage and Hour Act (N.C. Gen. Stat. § 95.25.1, et seq.) and accompanying regulations (13 NCAC 12.0101, et seq.) are the primary sources of wage and hour law. These laws require, among other things:

  • written notice of promised wages and the date and place for payment of wages at the time of hire;
  • 24 hours’ advance written notice of reductions in pay during employment; and
  • written policies on forfeiture of vacation, bonus, and commissions.

The statutes and regulations also contain youth employment rules.

Commission and bonus programs are construed against the employer when ambiguous. Employers that ignore the Wage and Hour Act do so at their own peril, since the act provides for double damages, attorney’s fees, and civil penalties. Employees claiming a violation may also file an administrative charge, which the North Carolina Department of Labor will investigate.

What is the minimum hourly wage?

Minimum wage is the same as required under the Fair Labor Standards Act. At present, the minimum wage is $7.25 per hour (N.C. Gen. Stat. § 95-25.3).

What are the rules applicable to final pay and deductions from wages?

Final pay must be made on the next regular payday following termination (N.C. Gen. Stat. § 95-25.7). However, wages based on bonuses, commission, or other forms of calculation may be paid on the first regular payday after the amount can be calculated. There are also detailed rules about withholding wages and making deductions from wages (N.C. Gen. Stat. § 95-25.8). When the amount or rate of the deduction is known and agreed on in advance, the employer must have a written authorization, which: is signed on or before the payday from which the deduction will be made; indicates the reason for the deduction; and states the dollar amount or percentage of wages to be deducted. If the deduction is made for the employee’s convenience, the employee must be given a reasonable opportunity to withdraw the authorization. When the amount of the proposed deduction is not known in advance, the employer must obtain a written authorization which is signed before the payday on which the deduction is to be made and indicates the reason for the deduction. Before making a deduction, the employee must be given written notice of the amount of the deduction and his or her right to withdraw the authorization and a reasonable opportunity to withdraw the authorization. Any withholding of wages for the employer’s benefit must also meet the following requirements: In weeks without overtime, wages may not be reduced below minimum wage. In weeks with overtime, deductions may be made only from wages for non-overtime hours, which may not be reduced below minimum wage. No deduction can be made from overtime. An employer may withhold from wages for cash shortages, inventory shortages, or loss or damage to the employer’s property, provided that the rules in paragraphs 1 and 2 above are met and the employee is given seven days’ prior written notice of the amount of the deduction. The seven-day rule does not apply when the deduction is made from the wages of a terminated employee. If the employee is charged with a crime as the result of the cash shortage, inventory loss, or loss or damage to the employer’s property, no written authorization is required, but the deduction must comply with the rules in paragraph 2 above. If the employee is found not guilty, any amounts withheld must be reimbursed to the employee. Loans or advances of wages are not subject to the written authorization rules in paragraph 1 above.

Hours and overtime
What are the requirements for meal and rest breaks?

There are no required meal or rest breaks under the Wage and Hour Act.

What are the maximum hour rules?

There are no maximum hour limits under the Wage and Hour Act.

How should overtime be calculated?

An employer must pay one and one half the regular rate of pay for each hour worked over 40 hours in the working week (N.C. Gen. Stat. § 95-25.4). However, employees of seasonal amusement or recreational establishments receive overtime only after working more than 45 hours in the working week.

What exemptions are there from overtime?

Businesses “engaged in commerce or in the production of goods for commerce” as defined in the Fair Labor Standards Act (FLSA) are exempt from the overtime and minimum wage provisions of the state Wage and Hour Act (but will be covered by the overtime requirement of the FLSA). There are numerous other exemptions for specific industries, which are listed in Section 95-25.14 (N.C. Gen. Stat. § 95-25.14).

The Department of Labor recently issued new updates to its regulations and what satisfies wage amounts under the salary basis test. These changes should be reviewed to ensure that each employee still satisfies the new requirements before taking advantage of this exemption from the state Wage and Hour Act.

Record keeping
What payroll and payment records must be maintained?

Employers must retain all records, posted notices, and writings required by the Wage and Hour Act and the rules and regulations promulgated there under for three years (13 NCAC 12.0802).

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