SMLR Info

PISCATAWAY, N.J. – Tens of thousands of workers in North Carolina are illegally paid below $7.25 an hour, but an exemption in the state’s labor law and a shortage of enforcement resources make it difficult for them to recoup lost earnings.

The Workplace Justice Lab@Rutgers University, a research center focused on strengthening labor standards enforcement in the U.S., analyzed 20 years of federal employment data to produce a comprehensive new report on minimum wage compliance in the Tar Heel State.

The report estimates that 1.4 million workers in North Carolina experienced minimum wage theft between 2003 and 2022—an average of nearly 72,000 workers per year. It’s a substantial loss of income for those who can least afford it. Each victim lost an average of $3,312 per year, or 28% of their wages, for a statewide total of $238 million annually.

“It’s hard to survive on $7.25 an hour under the best of circumstances,” said Jake Barnes, Research Project Manager for the Workplace Justice Lab@Rutgers University and lead author of the report. “But when you lose hundreds or even thousands of dollars a year to minimum wage theft, it becomes virtually impossible to support yourself and your family.”

The Rutgers report also finds:

• Food services and drinking places had the highest violation rate (7.4%) of any industry, followed by personal and laundry services (7.1%) and private households (6.5%).
• 13.8% of restaurant servers and 10.4% of childcare workers experienced a minimum wage violation, more than any other occupation for which estimates are possible.
• Non-citizens were 40% more likely to experience wage theft than citizens. The likelihood was even greater for non-citizens who are Latinx or Black.
• Asian/Pacific Islanders, women (all races), young people (16-24), seniors (65+), part-timers, and workers who did not finish high school faced higher rates of wage theft.
• The Jacksonville metropolitan area had the highest violation rate (3.7%), followed by Durham (3%), Fayetteville (2.8%), Raleigh (2.6%), and Burlington (2.6%).

North Carolina’s minimum wage protections do not apply to the vast majority of the state’s workers because of an exemption, G.S. 95-25.14(a)(1), for workers covered by federal law. Consequently, most wage theft victims must turn to the understaffed U.S. Department of Labor, which employs just 730 investigators to serve approximately 143 million workers nationwide.

“The exemption in North Carolina’s law leaves a gaping hole in the state’s minimum wage protections,” said Jenn Round, Director of the Beyond the Bill Program for the Workplace Justice Lab@Rutgers University. “With millions of dollars being stolen from hardworking North Carolinians each year, state lawmakers must step up to close this gap and provide meaningful state protections and enforcement. “

The Rutgers report calls on state lawmakers to better protect workers and compliant employers by staffing-up the Wage and Hour Bureau (WHB) and amending the Wage and Hour Act to:

• Eliminate the exemption for workers covered under federal law;
• Allow proactive investigations in high-violation industries;
• Increase penalties on employers that break the law; and
• Provide the WHB with meaningful tools to recover back wages.

“North Carolina workers deserve a fair day’s pay for a fair day’s work,” said Ben Wilkins, Director of the Union of Southern Service Workers. “It is imperative that the NC Wage and Hour Bureau is empowered with the resources and authority needed to ensure this basic right is upheld for all workers across our communities.”

Press Contact

Steve Flamisch
Rutgers School of Management and Labor Relations
848.252.9011 (cell)
steve.flamisch@smlr.rutgers.edu

About the Report

Minimum Wage Non-Compliance in North Carolina was written by Jake Barnes, Jenn Round, Daniel Galvin, and Janice Fine.

About Us

The Rutgers School of Management and Labor Relations (SMLR) is the world’s leading source of expertise on managing and representing workers, designing effective organizations, and building strong employment relationships. 

The Workplace Justice Lab@Rutgers University (wjl@RU) exists to address economic inequality through supporting and strengthening grassroots organizing and democratic governance. We do this through building dynamic communities of learning and practice, carrying out cutting edge research, and offering specialized training and in-depth one-on-one consultations.

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