The Fair Labor Standards Act is a federal law governing the definition of an exempt employee. The North Carolina Department of Labor follows the regulations in the FLSA for determining the status of exempt and non-exempt workers in the state. An employer incorrectly labeling a worker as exempt could face back wage claims from the misclassified worker.
Exempt Employee Salary Requirements
It isn't enough to simply pay an employee a salary to classify the worker as salary exempt in North Carolina or other states across the country. An employee must earn a guaranteed salary of at least $455 per week regardless of how few hours worked over the course of a given workweek. The employee also must pass a job duties test, including executive involvement in the company, daily management of a department or operating in an independent capacity as a learned professional. An outside sales professional is exempt from the salary requirement for determining an exempt employee, according to the North Carolina Department of Labor's website.
Overtime Wage Rules
A salary exempt employee does not receive overtime hours per the Fair Labor Standard Act. This means the exempt employee receives the same salary for working 50 hours in a standard workweek as for working 30 hours. The tradeoff in this arrangement is the exempt worker's employer cannot legally alter the employee's weekly pay based on performance or quality of work produced. Doing so could cause the worker's status to change to non-exempt, allowing the employee to file a wage claim for overtime pay for all hours worked for the employer.
Meal Breaks/Rest Periods
North Carolina labor laws do not require an employer to give a meal break or rest period to any worker who is 16 or older. An employer choosing to give a rest period or meal break must ensure an uninterrupted period to allow employees to eat or rest without engaging in work activities. If employees must engage in work activities while on break, the employer must compensate workers for this time. An employer cannot deduct a meal break or rest period from salary exempt workers because exempt status rules require guaranteed salaries.
Legal Reductions in Pay
An employer in North Carolina or any other state across the country can legally deduct the pay of an exempt employee under several circumstances. An employer may deduct a full day's salary from an exempt employee for taking a sick day when the employee does not have sufficient sick leave to cover the absence. An employer also may deduct a day's worth of salary for disciplinary reasons or when the employee takes a personal day off from work and does not have sufficient vacation days or personal days to cover the absence.