We know that small business owners in the Tar Heel state are eager to stay on top of minimum wage increases so we’ve put together this quick guide with all the info you need to know.
What is the 2020 minimum wage in North Carolina?
The minimum wage in North Carolina matches that of the federal minimum wage rate at $7.25 per hour for non-tipped employees. Exceptions to this minimum wage rate include:
Tipped employees for whom the state minimum wage is $2.13 per hour as long as the hourly wage and tips together meet the minimum wage.
Full-time students, learners, and apprentices who may be paid a subminimum wage rate that is no less than 90 percent of the state’s standard minimum wage.
Keep in mind that counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
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Are there plans to change the minimum wage in North Carolina?
North Carolina last raised its state minimum wage in 2008, when it increased $0.70, from $6.55 to $7.25 per hour. Charlotte’s minimum wage is also still at $7.25 an hour, though some large companies and government jobs in the city pay employees more.
In spring 2017, two separate pieces of legislation, the Economic Security Act of 2017 and Living Wage by 2022, were introduced to North Carolina’s House and Senate, each proposing the gradual increase of North Carolina’s state minimum wage from $7.25 to $15.00 per hour by 2021 or 2022. However, neither bill has advanced in the legislative process since being introduced. The coalition Raising Wages NC is pushing for an increase to $15 per hour over the course of five years.
What’s happening beyond 2020?
The minimum wage in North Carolina will remain at the federal level for the foreseeable future due to a lack of bipartisan legislative support for a statewide minimum wage increase.
How should small business owners prepare for possible changes to the minimum wage?
Even if changes to the minimum wage aren’t on the horizon, that doesn’t mean you shouldn’t prepare in case they ever are. Every business is different, so there isn’t one right way to do this. Here are a few options you may want to consider:
- Audit your expenses: Check your cash flow in detail and create a hiring plan that you can afford. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff.
- Make sure you hire and keep the right employees: Replacing an employee costs a lot. You decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
- Update tech: Consider automating certain aspects of the work (like payroll), and find ways to reduce production costs. Understanding the payroll basics will help your business prepare for any future North Carolina minimum wage increases.
As always, to make sure your business is prepared and stays in compliance (such as getting an EIN) with applicable wage laws, you should discuss North Carolina’s minimum wage laws with your trusted accountant and lawyer.