A new North Carolina law reiterates that HR life can be full of technicalities.
Just last month, Governor Cooper signed a bill requiring NC employers to do three simple things:
(i) for new employees, give them a written statement of their “promised wages” and the day and place of payment;
(ii) for existing employees, give them notice of any decrease in pay at least one pay period before the decrease takes effect; and
(iii) for departing employees, pay their final wages through normal payroll or through “trackable” mail if the employee requested in writing that it be mailed.
Let’s look at these “technicalities” in order.
For new hires, formal offer letters can be tricky if not carefully written. Loose language can sometimes create a contract that interferes with at-will employment. Certainly, offer letters would satisfy the statute, but so would a simple form to be signed at orientation stating the “initial hourly wage rate” or “initial salary rate”–depending on whether the job is non-exempt or exempt. The statute is very bare-bones. For example, it does not explain what writing is needed for more complicated pay arrangements like commissions or bonuses. Nor does it describe when a potential earning is in fact a “promised” wage. But, clearly, having as much in writing as possible about wages, commissions, bonuses, incentive pay, and benefits is even more important now.
For current employees facing a pay decrease, the rule seems self-explanatory–tell the employee at least one pay period prior to the change. But, wait, does that merely mean to tell them before the start of the pay period to which the reduction applies? Or, does it mean to tell them and then let one more full pay period at the current pay rate elapse? Or, does it mean to allow a pay period’s worth of days to elapse? Not clear. The intent was probably to create a simple rule that pay decreases can no longer start “tomorrow” (the old rule said 24-hour notice) but can only start “next pay period.” (Increases can still be effective tomorrow, or even retroactively.)
For departing employees, don’t send a last paycheck by regular mail. Mail gets lost. People leaving jobs move residences. It’s all the more reason to require direct deposits for payroll and to issue the last paycheck that same way. If direct deposit is not in effect, then either make the employee come pick it up or get a written request from the employee to have it sent by FedEx or some other trackable delivery. Simple right? Well, . . . what about an employer who still issues hard paychecks rather than direct deposit, and fires someone under testy circumstances? That employer does not want the person returning later, and the worker is in no mood to stop on the way out the door and make some written request related to how the last check will be delivered. For those employers, it is probably a good idea to have a document completed ahead of time (another one for orientation?) that constitutes a written request that the final paycheck be sent by FedEx.
Final word: these laws apply to NC employees and are not rules that employees in other states can rely on simply because the employer is located in NC. Rather, NC employers need to continue to abide by the pay laws in the states where employees work.