Published Date: 06/23/2014
By George Ports
Employers planning to reduce an employee’s pay are required by NC Wage Hour Law to give the employee written notice of such. The law requires this written notification to be at least 24 hours in advance of the effective date of the pay reduction, not 24 hours in advance of receiving the paycheck that reflects the reduction. CAI recommends, however, that as much advance notice is given as practically possible in keeping with positive employee relations practices.
If an employee experiences a permanent unilateral reduction in pay of more than 15 percent and resigns from employment, they will be eligible for unemployment benefits because such is considered by the Employment Security Act of North Carolina as “leaving with good cause attributable to the employer.” If, however, an employee resigned due to a pay reduction of more than 15 percent that was the result of a rule or procedure violation, the employee would not be eligible for unemployment benefits (CAI does not normally recommend reducing employee pay in conjunction with disciplinary measures).