North Carolina wage and hour law states that an employer must pay promised wages accruing to its employees based on any policy, agreement or practice that the employer has established. An NC employer is also required to make available to its employees, in writing or through a posted notice maintained in a place accessible to its employees, employment practices and policies with regard to promised wages. Wage benefits offered are included in this requirement.
Employers are not required by law to provide paid vacation, holidays, sick leave, jury duty or other benefits. However, to be competitive in the marketplace and for employee relations, these paid benefits are common. Once these benefits have been promised to employees through policy or agreement, they may not be forfeited unless there is a written forfeiture clause stating the reasons for forfeiture. (See NC GS 95-25.13 http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/BySection/Chapter_95/GS_95-25.13.pdf.)
In developing your benefit policies, it is important to be clear in establishing when employees become eligible for a benefit, when they earn it, and under what conditions they would forfeit the benefit. Also, if you change wages or a policy resulting in a reduced benefit, it must be in writing and be effective no earlier than 24 hours after notification (preferably more advanced notice). For example, if you wanted to reduce the carryover or payout of vacation in the future, you may not take away what employees have already earned. Clearly written policies avoid ambiguity and potential employee relations issues that may lead to wage and hour investigations.
For more information, attend the Advice and Resolution Corner Plus members-only webcast scheduled for this Wednesday, December 10 from 9:00 am until 9:30 am. You can self-register for this webinar at https://www4.gotomeeting.com/register/236781055.