What are the laws regarding the payment of bonuses?
In North Carolina, employers are required to pay bonus wages according to the state wage and hour law. Bonuses may be based on a number of different criteria, including performance, seniority, hours worked, or any other criteria the employer sets out. Every bonus must be paid in the same payment period as the employee’s regular wages, and employees cannot be asked to sign an agreement waiving their right to receive bonuses and other wages. Additionally, all bonuses must be paid in cash or by check, in a form that is negotiable and immediately available. Bonus payments cannot be delayed, held back, or made contingent upon any other condition. Employers are also responsible for withholding taxes from bonus payouts, in the same manner as from regular wages. Generally, bonuses are added to the total taxable wages for the pay period, determining the amount of taxes to be deducted and remitted to the federal and state agencies. Employees should be provided with a wage statement that shows the wages earned and any deductions taken. Lastly, it is important for employers to understand that bonuses cannot be used to reduce wages for any purpose, as this is against North Carolina wage and hour law. Any bonuses paid out should be in addition to the employee’s regular wages and not be used to replace any portion of those wages.
Related FAQs
What workers are not entitled to overtime pay?When can an employer legally deduct wages from an employee's paycheck?
What is the difference between an employee and an independent contractor?
What are the rules for paying interns?
Are employers allowed to require employees to sign a non-compete agreement?
Are employers required to pay double time for work on holidays?
Are employers allowed to withhold wages from employees?
How is wage and hour law different from labor law?
Are employers required to provide employees with work breaks?
Are public employers subject to the same wage and hour laws as private employers?
Related Blog Posts
What is Wage and Hour Law and How Does it Affect Your Business? - July 31, 2023What Employers Need to Know About Wage and Hour Law - August 7, 2023
The Basics of Payroll Law and Compliance - August 14, 2023
Compensating Your Employees - Tips for Wage and Hour Law Compliance - August 21, 2023
Understanding Overtime Rules Under Wage and Hour Law - August 28, 2023