North Carolina Wage and Hour Notice Adds Employee Misclassification to the Mix

2018 North Carolina Wage and Hour Peel 'N PostNorth Carolina employers, heads up! In one of the rare late-December / early-January changes that isn’t about minimum wage, the North Carolina Department of Labor has updated the mandatory Wage and Hour Notice to Employees with information about a new law that just went into effect – the Employee Classification Act.

The North Carolina General Assembly passed SB 207, or the Employee Fair Classification Act, during the 2017 legislative session. The Act, which became effective on December 31, 2017, mandated the creation of a new section of the N.C. Industrial Commission called the the Employee Classification Section. This section is dedicated to investigating reports of employees who may have been misclassified as independent contractors by their employers, usually for the purposes of avoiding tax liability or other obligations.

Although the Employee Classification Section has no enforcement capabilities on its own, it is required to collaborate with other state agencies in order to aid investigations into legal violations and assist in the recovery of back taxes, wages, benefits, penalties, or other monies owed due to employee misclassification. The Section is also required to make prevention efforts by developing educational programs for employers, employees, and the public about proper classification of employees.

Under N.C.G.S. 95-25.13, every employer subject to the Wage and Hour Act is required to display a poster summarizing its major provisions in every establishment subject to the Act. The Employee Classification Act added language to this requirement, stating that the poster must also indicate, in plain language, that:

  1. Any worker who is defined as an employee under existing North Carolina law shall be treated as an employee, unless that individual is an independent contractor.
  2. Any employee who believes that they have been misclassified may report the suspected misclassification to the Employee Classification Section.
  3. Information about the location where alleged misclassification may be reported to the Employee Classification Section.

The N.C. Department of Labor has added this information to the mandatory Wage and Hour Notice in a new section titled Employee Classification. The notice cites relevant sections of law to help individuals determine if they are legally considered an employee, and instructs employees on how to file a complaint with the Employee Classification Section by mail, email, phone, or fax.

In addition to this mandatory change, the portion of the notice which discusses the state’s Employment at Will and Right-To-Work laws has also been separated into two sections, and the description of Right-To-Work has been reworded for clarity. A section of the notice which discussed Right-To-Work in conjunction with the Supreme Court case CWA v. Beck has also been removed to maintain the length of the notice. Contact information has been updated.  There are also some visual differences as the main coloration of the form has changed from red to green.

If you already own one of Compliance Poster Company’s signature products, you can update with the quick and easy 2018 North Carolina Wage and Hour Peel ‘N Post™ sticker for only $9.95. If you’re looking for a complete compliance solution or wish to be up-to-date on all major and minor changes, order the North Carolina All-On-One™ Labor Law Poster, consolidating all state and federal required postings onto one convenient and attractive wall poster, or a Mobile Poster Pak™ booklet for mobile and off-site workers. North Carolina products are available in English and Spanish formats.

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