Understand Employment Law Basics in North Carolina
September 5th, 2021 by admin
The next two columns will address basic employment laws in North Carolina.
Unless one has a written contract, North Carolina generally follows the doctrine of “employment at will.” Even if the employer has an employee handbook or a progressive discipline policy, an employer can terminate an employee for most any reason except one which violates specific federal or state laws. For example, it is illegal for an employer to discriminate against an employee or applicant based on one’s race, religion, gender, national origin, pregnancy, age, disability, or sexual orientation.
What COVID-related questions may an employer ask an employee (current or prospective)? An employee must get vaccinated if the employer requests it unless the employee is: 1. disabled and protected from receiving a vaccine under the Americans with Disabilities Act; or 2. has a sincerely held religious belief. See https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws for additional information.
May a prospective employer order a background check? Yes. If an employer is paying a third-party company to conduct the background check, one must comply with the requirements of the Fair Credit Reporting Act (“FCRA”). Before an employer can request a background check, the FCRA requires that it provide the applicant with written notice a background check will be conducted and obtain their written consent. (There are other requirements for an employer if the check reveals disqualifying information.)
Are you hiring an employee or an independent contractor? There are different rules regarding what one is paid for each category, according to the Federal Fair Labor Standards Act.
There is another very narrow “other” category, exempt employees. This category excludes certain highly paid employees, such as doctors and lawyers, from many of these rules regarding hours worked, and the like.
There are distinctions between an employee and an independent contractor. In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?Financial: Are the business aspects of the worker’s job controlled by the payer? (How a worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)Type of Relationship: Are there written contracts or employee- type benefits (i.e., pension plan, insurance, vacation pay, etc.)? Will the relationship continue?Look at the entire relationship, consider the degree or extent of the right to direct and control, and document each of the factors used in making the determination.
See https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee for additional information.
If one is an (non-exempt) employee rather than an independent contractor, the employer must pay FICA on an employee’s wages. (The Federal Insurance Contributions Act -FICA- requires an employer to pay its share toward the Social Security and Medicare tax the employee must pay toward the overall Social Security and Medicare tax on one’s wages.) An employer must also pay an employee overtime (1 and ½ times) for each hour over 40 in a calendar week. The penalties for classifying a true (non-exempt) “employee” as an independent contractor are significant. For example, an employer cannot pay a true employee a bonus at the end of the year “to make up” for the lack of overtime paid contemporaneously in the weeks it was incurred.
If you have additional questions, contact the NC Bar Association Lawyer Referral Service, where one can get a 30-minute conference with a lawyer who practices employment law regularly for no more than $50. (800)-662-7660).
In the next column we will address common best practices for employers, such as establishing an employee manual, appropriate insurance coverages, and others.
Remember: An informed choice is a smart choice.
Posted in: WS Journal Articles