North Carolina Minimum Wage: $7.25 and Employer Rules

The first hourly job I priced in North Carolina sent me looking for a state number the way you look one up in California. North Carolina does have its own minimum wage law. It just points at a figure Congress last changed in 2009, so the search ends where it started.

That one fact decides most of what an employer needs here. Budgeting a first hire, checking whether a server is paid legally, deciding whether a city ordinance can reach your shop: the arithmetic starts at $7.25 and moves only when federal law moves.

This page covers the North Carolina rate and its effective date, the tip credit and the certification rule attached to it, the carve-outs that genuinely exist, and the poster duties. The broader state picture, including final pay and E-Verify, lives in the North Carolina HR compliance guide.

The Current North Carolina Minimum Wage

The North Carolina minimum wage is $7.25 per hour, and it has been that figure since the last federal increase took effect on July 24, 2009. The N.C. Department of Labor states the rate in one line and adds that it binds state, county and local government employers as well as private ones.

The statute behind it is worth reading once. G.S. 95-25.3(a) requires wages of at least $6.15 per hour or the federal minimum wage under 29 U.S.C. 206(a)(1), as that wage may change from time to time, whichever is higher. The state wrote a floor and then handed the escalator to Congress.

Is a North Carolina Increase Scheduled?

No increase is scheduled. The Wage and Hour Act carries no step schedule, no inflation index and no pending ballot measure, so nothing lifts the North Carolina rate automatically on January 1 the way it happens in indexed states.

The rate can move in exactly two ways. Congress can amend Section 6(a)(1) of the Fair Labor Standards Act, and the new figure becomes the North Carolina figure on the federal effective date without a single act of the General Assembly. Or the legislature can raise the $6.15 floor in the statute, which has sat unchanged since it took effect in 2007 according to the U.S. Department of Labor history of state rates.

The Department of Labor table of historical state rates shows the same path from the other side: North Carolina sits at $6.15 at the start of 2007 and 2008, at $6.55 at the start of 2009, and at $7.25 every year since 2010.

Tipped Employees and the Tip Credit

A tipped employee in North Carolina can be paid a cash wage of $2.13 per hour, with tips covering the rest of the $7.25. The maximum tip credit is $5.12, which is simply the gap between the two numbers, and the state sets the tipped employee threshold at more than $20 a month in tips.

North Carolina attaches a condition federal law does not. Under G.S. 95-25.3(f) the employer must keep accurate and complete records of tips received, and the employee must certify those tips in writing monthly or for each pay period. The U.S. Department of Labor state table repeats the point: no signed certification, no tip credit.

Tip pooling is allowed among employees who customarily and regularly receive tips, but the statute caps what a pool can take: no employee's tips may be reduced by more than 15 percent. NCDOL states the same rule from the employee side, as tipped employees retaining at least 85 percent of the tips they receive. The mechanics of a compliant arrangement are covered in our guide to tip pooling.

The state wage and hour rules at 13 NCAC 12 .0303 fill in the details. Certification is the employee's signature or initials on your records, accepting a paycheck is not certification, and where a customer tips on a card you may keep the pro rata share of the card issuer's fee attributable to the tip. For the underlying credit math, see minimum wage for tipped employees.

City and County Minimum Wage Rates in North Carolina

No North Carolina city or county sets a minimum wage for private employers. G.S. 95-25.1(d) provides that the Wage and Hour Act supersedes and preempts any ordinance, regulation, resolution or policy adopted by a unit of local government that regulates or imposes a requirement on an employer pertaining to compensation of employees.

The preemption is written broadly. It reaches wage levels, hours of labor, payment of earned wages, benefits, leave and the well-being of minors in the workforce, which is why no Charlotte, Raleigh or Durham ordinance can put a different number on your payroll. Five narrow situations sit outside it.

Read the exceptions carefully before assuming one applies to you. They cover a local government as an employer of its own staff and a handful of incentive and grant programs, not a general power to set wages inside city limits.

Industry Carve-Outs and Exemptions

North Carolina has no fast food wage, no healthcare wage and no regional wage. What the Wage and Hour Act has instead are exemptions from the state act, which is a different thing from an alternative rate, and a distinction that catches employers arriving from a state with industry tiers.

One exemption swallows most of the rest. G.S. 95-25.14(a)(1) exempts anyone employed in an enterprise engaged in commerce as defined by the Fair Labor Standards Act, and federal enterprise coverage reaches most businesses with at least $500,000 in annual sales. For a typical small employer the operative rule is federal, and the state act does the work for employees federal law does not reach.

The exemptions also run in the other direction. G.S. 95-25.14(a)(1)(b) says that an employee at an FLSA enterprise for whom the applicable federal minimum wage is lower than the state figure is not exempt from the state minimum wage, apart from learners, apprentices, students and handicapped workers as defined federally. If a worker is exempt from the state act but covered federally, review the federal classification rules in our guide to exempt versus non-exempt employees.

Youth and Training Wages

North Carolina has one subminimum rate of its own. G.S. 95-25.3(b) sets the wage for full-time students, learners, apprentices and messengers, as those categories are defined under the Fair Labor Standards Act, at 90 percent of the rate in effect under subsection (a), rounded to the lowest nickel. At a $7.25 floor the arithmetic lands on $6.50 per hour.

Treat that number carefully. NCDOL does not publish it as a separate figure, the federal definitions carry their own eligibility conditions, and G.S. 95-25.14(a)(1)(b) can pull an employee back under the full state minimum when the federal rate that applies to them is lower. Call the NCDOL Wage and Hour Bureau before you run payroll below $7.25 for anyone.

Federal law adds the youth wage: $4.25 per hour for an employee under 20 years old, during the first 90 consecutive calendar days after you initially employ them, under 29 U.S.C. 206(g). The clock runs on calendar days rather than days worked, and you may not displace an existing employee to use it.

Subsections (c), (d) and (e) of the statute let the Commissioner of Labor set lower rates by regulation, but the only subminimum wage rule on the books in 13 NCAC 12 is the disabled worker certificate at .0202, issued by the Wage and Hour Bureau administrator as a percentage of the state minimum wage. The 1980 rule covering students, learners and apprentices was repealed in 1982.

Hours and job restrictions for minors are a separate body of rules. North Carolina requires a youth employment certificate for 14 to 17 year olds in non-farm work and bars anyone under 18 from the hazardous occupations list, which we walk through in our guide to child labor laws.

Posters and Written Notice

North Carolina requires a state poster. The N.C. Department of Labor requires every business in the state to post the labor law poster in a conspicuous area that employees frequent. It arrives in two sections, the Occupational Safety and Health Notice to Employees and the Wage and Hour Notice to Employees, and NCDOL supplies it free by order form or by phone.

The federal poster is mandatory on top of that. 29 CFR 516.4 requires every employer with employees subject to the minimum wage provisions to post the Wage and Hour Division notice explaining the Act, in conspicuous places in every establishment, positioned so staff can read it.

Keep the underlying records. Tip certifications, rate histories and deduction statements are the evidence that answers a wage complaint, and they pair with the federal retention rules described in our guide to payroll records.

How North Carolina Relates to the Federal $7.25

North Carolina does not run a rate against the federal one so much as adopt whichever is higher. The federal minimum wage has been $7.25 since July 24, 2009, and the state floor written into the statute is $6.15, so the federal number has been the operative one for well over a decade.

If Congress raises the federal minimum, North Carolina employers inherit the new rate on the federal effective date, with no wait for the General Assembly and no state rulemaking. That is worth knowing before you sign a long fixed-price contract with thin labor margins. The national picture, including the full state by state table, is in our federal minimum wage guide.

If you hire outside North Carolina, the scheduled changes in other states are the ones that will bite, and we track them in federal and state minimum wage increases. Hiring your first employee in the state is a separate checklist, covered in how to hire employees in North Carolina.

What to Do When the Rate Rises

Because North Carolina tracks federal law, a rate change here arrives as a federal effective date rather than a state announcement. The work is the same either way, and it is worth having the sequence written down before you need it.

One North Carolina rule is worth memorizing here. G.S. 95-25.13(3) requires written notice at least one pay period before a change in promised wages, and NCDOL applies it to reductions in pay or wage benefits. Increases are the exception: wages may be raised retroactively without prior notice, so a late catch-up on a rate rise is fixable.

Keeping rate records, offer letters and signed acknowledgments together is what makes that audit take an afternoon rather than a week. That is the part FirstHR handles for small teams, and it is worth saying plainly that FirstHR is an onboarding and HR platform, not a payroll provider.

Frequently Asked Questions

What is the minimum wage in North Carolina?

It is $7.25 per hour, the federal figure that took effect on July 24, 2009. G.S. 95-25.3(a) requires at least $6.15 per hour or the federal rate under 29 U.S.C. 206(a)(1) as it changes, whichever is higher, and NCDOL states the current rate as $7.25 for private and government employers alike.

Is the North Carolina minimum wage going up?

No increase is scheduled. The rate rises only if Congress amends the Fair Labor Standards Act, which flows through automatically, or if the General Assembly raises the $6.15 floor in the statute, which has not moved since it took effect in 2007.

How much do I pay tipped employees in North Carolina?

A cash wage of $2.13 per hour with a tip credit up to $5.12, as long as cash plus tips reaches $7.25 every hour. North Carolina also requires accurate tip records certified in writing by the employee monthly or each pay period, and the tipped employee threshold is more than $20 a month in tips.

Can a North Carolina city or county set a higher minimum wage?

No. G.S. 95-25.1(d) preempts any local ordinance, regulation, resolution or policy imposing requirements on employers about compensation, hours, benefits or leave. The exceptions cover local governments paying their own employees, certain economic development incentives, block grant requirements and programs under G.S. 160D-1311.

Does North Carolina have a training wage or a youth wage?

It has a 90 percent rate for full-time students, learners, apprentices and messengers as defined federally, under G.S. 95-25.3(b), which is $6.50 at a $7.25 floor. Federal law separately allows $4.25 for employees under 20 during their first 90 consecutive calendar days. Confirm eligibility with NCDOL before paying either.

Does North Carolina require a minimum wage poster?

Yes. NCDOL requires the state labor law poster, which includes the Wage and Hour Notice to Employees, in a conspicuous area employees frequent, and supplies it free. The federal Wage and Hour Division notice is separately required by 29 CFR 516.4.

What happens when the federal minimum wage rises?

North Carolina inherits the new rate on the federal effective date with no state action. Recalculate the tip credit and the 90 percent student rate, update the posters, and remember that raises can be applied retroactively without the advance notice G.S. 95-25.13(3) requires for reductions.