What Is the Minimum Wage in North Carolina?

Ben Steele
A long exposure photograph of the skyline and highway of Raleigh, North Carolina, with a deep blue sky.
Reading Time: 3 minutes

2020 Minimum Wage in North Carolina: $7.25 per hour

The minimum wage in North Carolina is the same as the federal minimum wage, $7.25 per hour, and is raised when the federal minimum wage is raised. That means the $7.25 rate is standard across the state; however, North Carolina does note that agricultural and domestic workers are covered under federal minimum wage rules, which means that if the state minimum wage changed, those workers would use the federal minimum wage instead.

Tipped Minimum Wage: $2.13 per hour

The minimum wage for employees who earn tips in North Carolina is $2.13 per hour. Tipped employees in North Carolina are covered, like many other states, by a tip credit system. Employers must ensure that tipped employees make at least $7.25 per hour, however, they are allowed to apply as much as $5.12 per hour as a credit for tips earned.

This means that employers must pay a cash wage of $2.13 per hour, and can make up the rest of the $7.25 wage in tips — provided the employee actually earns enough in tips to make a wage of $7.25 per hour.

Employers are allowed to “tip pool,” but employees are entitled to 85% of their own tips. The remaining 15% can be pooled. This means that employers need to keep accurate records of the tips given to each employee for the purposes of reporting and compliance.

Weekly Minimum Wage: $290 per week

Someone who works a 40-hour week in North Carolina will make $290 if they are being paid the standard minimum wage of $7.25 per hour. This is calculated before federal or North Carolina state taxes, and other deductions are exacted, so a worker’s take-home amount will be less. The exact amount will further depend on factors such as company-sponsored health insurance and retirement deductions.

Annual Minimum Wage: $15,080 per year

The annual minimum wage of $15,080 is calculated based on the minimum wage for a 40-hour workweek, multiplied by 52 weeks. This is the pre-tax, pre-deduction minimum that a worker should make annually. It doesn’t account for factors such as time off, vacation hours, or holiday pay, as it’s based on the standard 40 hours worked every single week.

Overtime Minimum Wage: $10.88 per hour

Employees who earn the minimum wage will be paid $10.88 per hour for any overtime hours they work. The minimum overtime rules in North Carolina state that unless an employee is explicitly exempt, any hours above 40 worked in one week must be paid at regular rate plus one half of the regular rate (time and a half). Some salaried workers may be exempt from either state or federal overtime laws.

Overtime applies for tipped workers and is based on the total wage (cash wage plus tips) of $7.25. The employer can still deduct $5.12 from the overtime pay if the employee makes enough in tips. Therefore a tipped worker’s minimum overtime pay would be $10.88 minus the $5.12 credit. 

2020 North Carolina Minimum Wage Increase News

Currently, there are no plans to raise the minimum wage in North Carolina. In recent years, there have been multiple failed attempts to raise the minimum wage, including a 2019 bill that would’ve increased it to $15 per hour and two 2017 bills — the Economic Security Act of 2017 and Living Wage By 2022 — that would have done the same. Amid calls for a national $15 minimum wage and the skyrocketing costs of living in different cities across the US, there may be additional attempts to increase North Carolina’s minimum wage later in 2020.

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