Employment Agreements/Contractual Obligations

The Wage and Hour Bureau investigates wage complaints on a case-by-case basis. Our bureau reviews company policies regarding promised wages; however, our bureau does not delve into employment agreements/contractual obligations. If an employee and employer have a signed employment agreement and/or contract, such contracts are better addressed in a court of law to determine the contractual obligations of the parties. Aggrieved employees have a private right of action to sue an employer to recover wages per N.C. General Statute 95-25.22(b). Wage and Hour investigators do not determine contractual obligations as it would, in essence, be practicing law without a license; the investigators are not licensed attorneys.

An “employment agreement” is a legally binding document (contract) signed by an employer and an employee. An employment contract may be for permanent employment or for temporary employment/employment for a fixed term; independent contractors also enter into contracts. The employment agreement/contract generally sets out the requirements of the position, rights, and responsibilities of both the employer and the employee, and includes any special obligations that may be unique to the position. Employees may negotiate the employment terms of the employment agreement/contract, including salary and benefits, before signing an employment agreement/contract, which remains active throughout the entire tenure of the employee until replaced by a new or modified employment agreement/contract. Employment contracts also may contain restrictive covenants, which limit actions or prohibit employees from specific actions, such as non-compete clauses.

If you believe you have a breach of contract situation, please seek the advice of a licensed attorney who specializes in the area of employment law or employer contracts. Additionally, employees may seek “specific performance” of a contract to rectify the situation, such as reinstatement if the employee is wrongfully terminated. Again, please seek the advice of a licensed attorney.

A lawsuit is a claim or dispute brought to a court of law to resolve. North Carolina’s trial court system has two divisions: District Court and Superior Court. Both divisions are generally located in the same courthouse in each county but have different judges. The Superior Court division handles civil cases involving a claim for more than $25,000. The District Court division handles civil cases involving a claim for $25,000 or less. https://www.nccourts.gov/help-topics/lawsuits-and-small-claims/lawsuits. In addition, there is small claims court. Small claims court is part of the district court division of the North Carolina state court system. Magistrates decide cases in small claims court. The maximum amount of money that can be requested in a small claims case varies by county, from $5,000 to $10,000. Cases include those where the amount of money sought in the complaint does not exceed $10,000. The dollar limit varies from $5,000 to $10,000 depending on local rules. The public may contact the clerk of court in their county of residence to find out your local small claims court limit. https://www.nccourts.gov/help-topics/lawsuits-and-small-claims/small-claims

Per North Carolina General Statute 95-25.13 of the NC Wage and Hour Act:

Every employer shall do all of the following:

  1. Notify its employees, in writing at the time of hiring, of the promised wages and the day and place for payment.
  2. 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.
  3. Notify employees, in writing, at least one pay period prior to any changes in promised wages. Wages may be retroactively increased without the prior notice required by this subsection.
  4. Furnish each employee with an itemized statement of deductions made from that employee's wages under G.S. 95-25.8 for each pay period such deductions are made.

Per North Carolina General Statutes 95-25.2(16), wage is defined as follows:

"Wage" paid to an employee means compensation for labor or services rendered by an employee whether determined on a time, task, piece, job, day, commission, or other basis of calculation, and the reasonable cost as determined by the Commissioner of furnishing employees with board, lodging, or other facilities. For the purposes of G.S. 95-25.6 through G.S. 95-25.13 "wage" includes sick pay, vacation pay, severance pay, commissions, bonuses, and other amounts promised when the employer has a policy or a practice of making such payments.

Any complaint to the NCDOL Wage & Hour Bureau would only result in a wage payment for wages not paid. It would not provide any damages or final decision as to a violation of the terms of the contract, to include job duties, benefits, non-compete clauses, or other conditions.