North Carolina Deductions From Pay laws & compensation compliance analysis

North Carolina Deductions From Pay: What you need to know

North Carolina restricts an employer's right to deduct money from an employee's wages (NC Gen. Stat. Sec. 95-25.8). An employer may withhold or divert any portion of an employee's wages when:
• The employer is required or empowered to do so by state or federal law;
• When the amount or rate of the proposed deduction is known and agreed upon in advance (the employer must have written authorization from the employee, which is signed on or before the payday(s) for the pay period(s) from which the deduction is to be made); indicates the reason for the deduction; and states the actual dollar amount or percentage of wages that will be deducted from one or more paychecks. If the deduction is for the convenience of the employee, the employee must be given a reasonable opportunity to withdraw the authorization; or
• When the amount of the proposed deduction is not known and agreed upon in advance, the employer must have written authorization from the employee, which is signed on or before the payday(s) for the pay period(s) from which the deduction is to be made and indicates the reason for the deduction. Before any deductions are made under this section, the employee must receive advance written notice of the actual amount to be deducted, receive written notice of his or her right to withdraw the authorization, and be given a reasonable opportunity to withdraw the authorization in writing.
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Deductions for the employer's benefit. The deduction for amounts owed for the employer's benefit must comply with the following requirements:
• In nonovertime workweeks, an employer may reduce wages to the minimum wage level.
• In overtime workweeks, employers may reduce wages to the minimum wage level for ...

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