(a) An employer may withhold or divert any portion of an employee's wages when:
(1) The employer is required or empowered to do so by State or federal law;
(2) When the amount or rate of the proposed deduction is known and agreed upon in advance, the employer must have written authorization from the employee which (i) is signed on or before the payday(s) for the pay period(s) from which the deduction is to be made; (ii) indicates the reason for the deduction; and (iii) states the actual dollar amount or percentage of wages which shall be deducted from one or more paychecks. Provided, that if the deduction is for the convenience of the employee, the employee shall be given a reasonable opportunity to withdraw the authorization; or
(3) When the amount of the proposed deduction is not known and agreed upon in advance, the employer must have written authorization from the employee which (i) is signed on or before the payday(s) for the pay period(s) from which the deduction is to be made; and (ii) indicates the reason for the deduction. Prior to any deductions being made under this section, the employee must (i) receive advance written notice of the actual amount to be deducted; (ii) receive written notice of their right to withdraw the authorization; and (iii) be given a reasonable opportunity to withdraw the authorization in writing.
(b) The withholding or diversion of wages owed for the employer's benefit must comply with the following requirements:
(1) In nonovertime workweeks, an employer may reduce wages to the minimum wage level.
(2) In overtime workweeks, employers may reduce wages to the minimum wage level for nonovertime hours.
(3) No reductions may be made to overtime wages owed.
(c) In addition to complying with the requirements in subsections (a) and (b) of this section, an employer may withhold or divert a portion of an employee's wages for cash shortages, inventory shortages, or loss or damage to an employer's property after giving the employee written notice of the amount to be deducted seven days prior to the payday on which the deduction is to be made, except that when a separation occurs the seven-day notice is not required.
(d) Notwithstanding subsections (a) and (b), above, an overpayment of wages to an employee as a result of a miscalculation or other bona fide error, advances of wages to an employee or to a third party at the employee's request, and the principal amount of loans made by an employer to an employee are considered prepayment of wages and may be withheld or deducted from an employee's wages. Deductions for interest and other charges related to loans by an employer to an employee shall require written authorization in accordance with subsection (a), above.
(e) Notwithstanding subsections (a) and (c), above, if criminal process has issued against an employee, an employee has been indicted, or an employee has been arrested pursuant to Articles 17, 20, and 32 of Chapter 15A of the General Statutes for a charge incident to a cash shortage, inventory shortage, or damage to an employer's property, an employer may withhold or divert a portion of the employee's wages in order to recoup the amount of the cash shortage, inventory shortage, or damage to the employer's property, without the written authorization required by this section, but the amount of such withholdings shall comply with the provisions of subsection (b) of this section. If the employee is not found guilty, then the amount deducted shall be reimbursed to the employee by the employer.
(f) For purposes of this section, a written authorization or written notice may be in the form of an electronic record in compliance with Article 40 of Chapter 66 (the Uniform Electronic Transactions Act).
(g) Nothing in this Article shall preclude an employer from bringing a civil action in the General Court of Justice to collect any amounts due the employer from the employee. (1975, c. 413, s. 6; 1979, c. 839, s. 1; 1981, c. 663, s. 2; 2005-453, s. 16.)
§§ 95-25.9, 95-25.10: Repealed by Session Laws 2005-453, ss. 17 and 18, effective October 1, 2005.
Notes of Decisions
Garcia v. Frog Island Seafood, Inc., 644 F. Supp. 2d 696 (E.D.N.C. 2009).
· cites it 16× “Defendants contend that they substantially complied with the requirements of N.C.G.S. § 95-25.8 in that Plaintiffs were (1) provided a pay stub on each pay date which itemized all deductions, including any for lost knives, see Payroll Records [DE-45.”
Hyman v. Efficiency, Inc., 605 S.E.2d 254 (N.C. Ct. App. 2004).
· cites it 26× “Blanket and Specific Authorizations of Wage Withholding N.C. Gen. Stat. § 95-25.1 et seq. comprise the NCWHA.”
Whitehead v. Sparrow Enter., Inc., 605 S.E.2d 234 (N.C. Ct. App. 2004).
· cites it 24× “First, plaintiff argued the wage deductions for the communal transportation were illegal under N.C. Gen. Stat. § 95-25.8 . Second, plaintiff argued employees who elect to use the optional transporta *181 tion should be paid for time spent while both waiting for the van and…”
Gaxiola v. Williams Seafood of Arapahoe, Inc., 776 F. Supp. 2d 117 (E.D.N.C. 2011).
· cites it 8× “rder crossing expenses and fees which were deducted from the weekly pay of plaintiff and members of the proposed class were primarily for the benefit of the defendants; (3) Whether the defendants failed to pay wages when due based upon the defendants’ failure to obtain a written…”
Leverette v. Labor Works Int'l, LLC, 636 S.E.2d 258 (N.C. Ct. App. 2006).
· cites it 11× “See N.C.G.S. § 95-25.8 (2003). Two types of written authorizations are permitted: a.”
Romero v. Mountaire Farms, Inc., 796 F. Supp. 2d 700 (E.D.N.C. 2011).
· cites it 3× “Plaintiffs allegations are sufficient to show that Mountaire’s deduction practice is commonly employed in violation of N.C. Gen. Stat. § 95-25.8 . Pursuant to that statute, an employer may withhold any portion of an employee’s wages in two situations: (1) when the employer is…”
Strickland v. MICA Info. Sys., 800 F. Supp. 1320 (M.D.N.C. 1992).
· cites it 7× “The complaint alleges that: (1) MICA violated the Fair Labor Standards Act (FLSA) § 215 by discharging her in retaliation for her pursuit of a complaint with the Department of Labor; (2) MICA violated the FLSA § 207 by not compensating her for overtime; (3) MICA violated…”
West v. J.O. Stevenson, Inc., 164 F. Supp. 3d 751 (E.D.N.C. 2016).
· cites it 2× “Plaintiff contends that this system of deductions was never reduced to writing, and that, as a result the Stevenson Automotive Group defendants began withholding his earned pay without his consent, in violation of N.C. Gen. Stat. § 95-25.8 . Plaintiff alleges that he became…”
Morales v. Showell Farms, Inc., 910 F. Supp. 244 (M.D.N.C. 1995).
· cites it 4× “Showell, therefore, incorrectly asserts that the FLSA so completely pre-empts Morales’ claims that they are automatically converted into federal claims. 2 Second, when enacting the FLSA Congress did not express any clear, unqualified intent to make claims such as those Morales…”
Murphy v. First Union Capital Markets Corp., 567 S.E.2d 189 (N.C. Ct. App. 2002).
· cites it 2× “The Wage and Hour Act defines “wage” as: compensation for labor or services rendered by an employee whether determined on a time, task, piece, job, day, commission, or other basis of calculation .”
Harper v. Vohra Wound Physicians of NY (N.C. Ct. App. 2020).
· cites it 6× “See N.C.G.S. § 95-25.8 (2017) (“An employer may withhold or divert any portion of an employee’s wages when: (1) The employer is required or empowered to do so by State or federal law[.”
Harper v. Vohra Wound Physicians of NY (N.C. Ct. App. 2020).
· cites it 6× “See N.C.G.S. § 95-25.8 (2017) (“An employer may withhold or divert any portion of an employee’s wages when: (1) The employer is required or empowered to do so by State or federal law[.”
— N.C. Gen. Stat. § 95-25.8(1) — 1 case
— N.C. Gen. Stat. § 95-25.8(2) — 1 case
Morales v. Showell Farms, Inc., 910 F. Supp. 244 (M.D.N.C. 1995).
“Showell, therefore, incorrectly asserts that the FLSA so completely pre-empts Morales’ claims that they are automatically converted into federal claims. 2 Second, when enacting the FLSA Congress did not express any clear, unqualified intent to make claims such as those Morales…”
— N.C. Gen. Stat. § 95-25.8(a)(2) — 1 case
Garcia v. Frog Island Seafood, Inc., 644 F. Supp. 2d 696 (E.D.N.C. 2009).
“Defendants contend that they substantially complied with the requirements of N.C.G.S. § 95-25.8 in that Plaintiffs were (1) provided a pay stub on each pay date which itemized all deductions, including any for lost knives, see Payroll Records [DE-45.”
— N.C. Gen. Stat. § 95-25.8(c) — 1 case
Garcia v. Frog Island Seafood, Inc., 644 F. Supp. 2d 696 (E.D.N.C. 2009).
“Defendants contend that they substantially complied with the requirements of N.C.G.S. § 95-25.8 in that Plaintiffs were (1) provided a pay stub on each pay date which itemized all deductions, including any for lost knives, see Payroll Records [DE-45.”
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