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 the federal figure Congress last changed in 2009, so the search ends where it started: the federal number is the North Carolina number.

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, why no city or county can set its own rate, the carve-outs that genuinely exist, the poster duties, and what to do when the rate rises.

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 (NCDOL) 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 handed the escalator to Congress: when the federal rate is higher, you pay it.

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. The first is federal: Congress can amend Section 6(a)(1) of the Fair Labor Standards Act (FLSA), and the new figure becomes the North Carolina figure on the federal effective date without a single act of the General Assembly.

The second runs through the legislature, which can raise the $6.15 floor in the statute. That floor 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 year by year: 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.

Why $15 Keeps Coming Up in North Carolina

No private employer in North Carolina owes $15 an hour by law. That number circulates because proposals to lift the state floor draw attention, but none of them has reached the statute book: G.S. 95-25.3(a) still reads $6.15 with the federal rate layered on top, and NCDOL still publishes $7.25 as the operative figure.

Treat a proposed rate as news rather than as a payroll input. The figure that binds you is the one in the statute on the day you run payroll, and in this state nothing raises it except an act of Congress or an act of the General Assembly.

There is one place a $15 floor is real here, and the preemption table further down explains it. G.S. 95-25.1(d)(1) lets a local government set pay for its own employees, so a city or county can put its own workforce at $15 or above. That tells you nothing about what a private employer in the same county owes, which is still $7.25.

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.

G.S. 95-25.2(14) decides who counts as tipped in the first place: an employee who customarily receives more than $20 a month in tips. Below that line there is no tip credit to take, so the full $7.25 has to arrive as cash wages whatever the customers leave on the table.

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 sums up the general rule: no signed certification, no tip credit.

The state wage and hour rules at 13 NCAC 12 .0303 fill in the details. Certification means the employee's signature or initials on your records, and simply accepting a paycheck does not count. Where a customer tips on a card, you may keep the tip's pro rata (proportional) share of the card issuer's fee.

The statute does leave a fallback when an employee refuses to certify tips accurately. G.S. 95-25.3(f) still lets you count tips as wages if you meet the other conditions and can show, by monitoring tips, that the employee regularly receives the amount you credit. Keep that monitoring evidence with the payroll file.

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.

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.

Preemption means state law overrides the local rule, and this one 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. An exemption is not an alternative rate, and the difference 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 or in the production of goods for commerce as defined by the Fair Labor Standards Act. That is a wide net, and it means the state act starts where federal enterprise coverage stops.

Federal enterprise coverage is the reason that net is wide. The U.S. Department of Labor sets the enterprise test at $500,000 in annual gross volume of sales made or business done, and a business at or above that line is covered by the FLSA as an enterprise.

A smaller business is not outside federal law. Its employees are still covered individually if they engage in interstate commerce, for example by handling goods that move across state lines or keeping records of interstate transactions. The state act covers employees outside a covered enterprise, and NCDOL describes the businesses it covers for minimum wage as generally those under $500,000 in gross sales.

The exemptions also run in the other direction. Under G.S. 95-25.14(a)(1)(b), an employee at an FLSA enterprise is not exempt from the state minimum wage if the federal minimum wage that applies to them is lower than the state figure. That pull-back does not reach learners, apprentices, students and handicapped workers as defined federally.

Youth and Training Wages

North Carolina has one subminimum rate of its own: a lawful rate below the standard minimum. G.S. 95-25.3(b) sets it for full-time students, learners, apprentices and messengers, as the FLSA defines those categories, at 90 percent of the state rate under subsection (a), rounded down to the nearest 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. In practice, the only subminimum wage rule on the books in 13 NCAC 12 is the disabled worker certificate at .0202, which the Wage and Hour Bureau administrator issues 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 says every business in the state must 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 FLSA, in conspicuous places in every establishment, positioned so staff can readily observe a copy.

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 compete with the federal rate; it adopts whichever of the two rates 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.

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 payroll work is the same whichever government moves the number, so 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 the first-run 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. G.S. 95-25.2(14) puts the tipped employee threshold at 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.

Is the North Carolina minimum wage going to $15 an hour?

Not under current law. G.S. 95-25.3(a) still sets the floor at $6.15 or the federal rate, whichever is higher, so private employers owe $7.25 and no proposal has changed that. Where the $15 figure does turn up here, it is usually a local government paying its own staff under G.S. 95-25.1(d)(1), which changes nothing for private employers.

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.