US Regional Employment 2020

Last Updated September 30, 2020

North Carolina

Law and Practice

Authors



Poyner Spruill has a labor and employment practice group that consists of seven partners, two associates, and one of counsel, spread across three of the firm’s four office locations – Charlotte, Raleigh, and Rocky Mount, North Carolina. In addition, Poyner Spruill boasts a separate employee benefits practice group that consists of three partners, and two associates, based out of the firm’s Charlotte and Raleigh offices. The firm primarily focuses on two areas of employment law: defense of administrative and judicial claims by employees and proactive workplace management. The labor and employment practice group helps clients establish practical and useful employment policies, advises on the day-to-day implementation of policy and employment laws, and assists in difficult situations involving disciplinary action, termination, employee counseling, FMLA and ADA leave requests, employee violence, privacy, disability and religious accommodation, internal complaints of discrimination, retaliation, harassment, and other complex issues.

As a result of the COVID-19 pandemic, many employers have transitioned to remote work for employees. Employers have also implemented new policies for federally mandated COVID-related leave and childcare leave. It remains to be seen if these changes are temporary or will have a long-term impact on the workplace.

There have also been lay-offs and significant loss of employment as a result of the COVID-19 pandemic. According to the North Carolina Department of Commerce, North Carolina’s seasonally adjusted May unemployment rate was 12.9%, remaining unchanged from April’s revised rate. The national rate decreased by 1.4% to 13.3%.

North Carolina’s May 2020 unemployment rate increased 8.9% from a year ago. The number of people employed increased by 118,154 over the month to 4,200,388 and decreased 662,968 over the year. The number of people unemployed increased by 16,021 over the month to 621,713 and increased by 417,511 over the year.

While there have been no recent changes to the law as a result of these movements, data maintained by the Equal Employment Opportunity Commission (EEOC), the agency tasked with enforcing federal law prohibiting discrimination and harassment, shows continued activity in claims filed. Data for 2020 is not yet available.

In the fiscal year 2019, data shows that retaliation continued to be the most frequently filed charge with the EEOC, followed by disability, race and sex. The EEOC also received 7,514 sexual harassment charges – 10.3% of all charges, and an 1.2% decrease from the 2018 fiscal year. Specifically, the charge numbers show the following breakdowns by bases alleged, in descending order:

  • retaliation – 39,110 (53.8% of all charges filed);
  • disability – 24,238 (33.4%);
  • race – 23,976 (33.0%);
  • sex – 23,532 (32.4%);
  • age – 15,573 (21.4%);
  • national origin – 7,009 (9.6%);
  • color – 3,415 (4.7%);
  • religion: 2,725 (3.7%);
  • Equal Pay Act – 1,117 (1.5%);
  • genetic Information – 209 (0.3%).

(These percentages add up to more than 100% because some charges allege multiple bases.)

A total of 4.6% of total EEOC charges filed in the USA in 2019 were filed in North Carolina.

As a result of the “Black Lives Matter” and “Me Too” movements, there is renewed focus on workplace training, as well as other forums to engage employees in discussions to ensure workplaces are inclusive. Employers are also creating new roles within their companies that are responsible for overseeing diversity and inclusion.

Employers should review handbooks and have clear reporting procedures for workplace discrimination and harassment.

Employers should also implement and review internal processes for the investigation of complaints.

The "gig" economy raises questions of proper classification of workers as employees or independent contractors. The North Carolina Department of Labor (NCDOL) defines an employee as someone who is dependent on the business that he or she serves. An independent contractor is typically a worker who is engaged in a business of his or her own. Factors considered by the NCDOL in determining whether a worker is an employee or an independent contractor include:

  • the extent to which the services rendered are an integral part of the principal's business;
  • the permanency of the relationship;
  • the amount of the alleged contractor's investment in facilities and equipment;
  • the nature and degree of control by the principal;
  • the alleged contractor's opportunities for profit and loss;
  • the amount of initiative, judgment or foresight in open-market competition with others required for the success of the claimed independent contractor; and
  • the degree of independent business organization and operation.

Factors typically not considered by NCDOL include the place where work is performed, the absence of a formal employment relationship, whether an alleged independent contractor is licensed by state/local government, and time and mode of pay.

North Carolina law creates a rebuttable presumption that drivers for transportation network companies (TNC) are independent contractors and not employees (N.C. Gen. Stat. § 20-280.8). The presumption may be rebutted by application of the common law test for determining employment status. A TNC is defined as “any person that uses an online-enabled application or platform to connect passengers with TNC drivers who provide prearranged transportation services” (N.C. Gen. Stat. § 20-280.1).

The federal CARES Act, enacted in response to the COVID-19 pandemic, gives states the option to extend unemployment compensation to independent contractors and other workers, who are ordinarily ineligible for unemployment benefits. North Carolina has agreed to this coverage, and North Carolina independent contractors and self-employed workers out of work because of COVID-19 can apply for federal Pandemic Unemployment Assistance while such benefits are available.

North Carolina has one of the lowest percentages of unionized workers in the country. There is no indication this has been impacted by the COVID-19 pandemic.

The National Labor Relations Board (NLRB) enforces the National Labor Relations Act (NLRA). New appointees to the NLRB have been proactive in overturning prior NLRB precedent, by:

  • creating new standards for evaluating workplace policies;
  • returning to narrower joint-employment standard governing in which employers may be jointly liable for violations of the NLRA; and
  • adoption of a business-friendly micro-union test.

Employers with non-unionized workplaces should continue to be cautious of unfair labor practices violations based on protected concerted activity where employees raise concerns about COVID-19 and the workplace.

It is important for employers to define and understand the relationship with workers. Some common alternative worker relationships are discussed below.

The test for determining whether an individual is an employee or independent contractor under North Carolina law is set forth in 1.3 "Gig" Economy and Other Technological Advances. Misclassification of employees as independent contractors can subject employers to payment of an employee’s workers’ compensation claim, monetary penalties and criminal charges. Other consequences of misclassifying employees include employer liability for unpaid payroll taxes to the North Carolina Department of Revenue and the Internal Revenue Service and unemployment benefits.

If two entities are joint employers, they are both responsible for compliance with federal and state law. A Fourth Circuit Court of Appeals decision (the federal court with jurisdiction over North Carolina, South Carolina, Virginia, West Virginia and Maryland) clarified the joint employer test under the Federal Fair Labor Standards Act: “Whether two or more persons or entities are ‘not completely disassociated’ with respect to a worker such that the persons or entities share, agree to allocate responsibility for, or otherwise codetermine – formally or informally, directly or indirectly – the essential terms and conditions of the worker's employment" (Salinas v Commercial Interiors, Inc., 848 F.3d 125, 141 (4th Cir. 2017)).

The court also provided six factors to guide the analysis of whether a joint employment relationship exists:

  • whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to direct, control, or supervise the worker, whether by direct or indirect means;
  • whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to – directly or indirectly – hire or fire the worker or modify the terms or conditions of the worker's employment;
  • the degree of permanency and duration of the relationship between the putative joint employers;
  • whether, through shared management or a direct or indirect ownership interest, one putative joint employer controls, is controlled by, or is under common control with, the other putative joint employer;
  • whether the work is performed on premises owned or controlled by one or more of the putative joint employers, independently or in connection with one another; and
  • whether, formally or as a matter of practice, the putative joint employers jointly determine, share or allocate responsibility over functions ordinarily carried out by an employer, such as:
    1. handling payroll;
    2. providing workers' compensation insurance;
    3. paying payroll taxes; or
    4. providing the facilities, equipment, tools or materials necessary to complete the work.

However, this joint employment analysis does not apply to franchisors and franchisees when analyzing state law liability. Under a recently enacted North Carolina law, franchisors will not be held liable for state law violations by their franchisees (N.C. Gen. Stat. § 95-25.24A).

Currently, through two Presidential Proclamations, non-immigrant visas sponsored by employers have been placed on hold in terms of visa issuance at the US Embassy or Consulate where the beneficiary resides until at least January 1, 2021. There are exemptions if visa issuance would be in the national interest, COVID-19 research or care-related, or for other similar reasons.

The coveted H-1B visa for professionals, which is usually vastly oversubscribed, has required selection through a lottery for the past several years. In 2020, the lottery was conducted first by a registration of the prospective employer with the United States Citizenship & Immigration Services (USCIS), and, if the prospective employer was selected, submission of the actual visa petition. Due to a downturn in employers petitioning for the H-1B visa because of COVID-19, there are now more H-1B visas available such that – as of Friday, August 14, 2020 – employers who were not selected in the lottery are being notified if they are being picked and can apply.

To address the temporary and seasonal agricultural industry adversely impacted by COVID-19, all H-2A petitioners with a valid temporary labor certification can start employing foreign workers who are currently in the USA and in valid H-2A status immediately after USCIS receives the H-2A petition, but no earlier than the start date of employment listed on the petition. Additionally, USCIS is temporarily allowing H-2A workers to stay beyond the three-year maximum allowable period of stay in the USA. These temporary changes will facilitate employment of these foreign temporary and seasonal agriculture workers during the COVID-19 national emergency.

Historically, USCIS has been largely self-funded through its filing fees. Due to the downturn in the number of petitions being filed, and hence less revenue derived from filing fees, USCIS is increasing its filing fees substantially. 

Finally, USCIS had requested Congress for additional funding to respond to this shortfall in filing fees which was granted at the last minute, averting a furlough of two-thirds of its workforce scheduled to occur on August 30, 2020. As a further result, USCIS is also significantly increasing most filing fees, effective October 2, 2020.

Union membership is low in North Carolina compared to other states. If a union or other concerted activity by employees is involved, federal laws under the National Labor Relations Act will apply. North Carolina law prohibits an employer from denying an individual the right to work based on membership or non-membership of a union (N.C. Gen. Stat. §§ 95-80, 95-81).

Employers must follow federal guidance from the Department of Labor and Equal Employment Opportunity Commission regarding hiring, accommodation, leave, and screening requirements during the COVID-19 pandemic.

Employers must follow federal laws that prohibit discrimination against applicants in hiring based on protected characteristics including age, race, religion, national origin, disability, pregnancy, veteran status, gender identity (including transgender status and sexual orientation according to the Equal Employment Opportunity Commission), genetic information or citizenship.

In addition, the North Carolina Equal Employment Practices Act prohibits employers who regularly employ 15 or more employees from discriminating against employees based on race, religion, color, national origin, age, sex or handicap (N.C. Gen. Stat. § 143-422.2).

Employers should not ask employees about these protected characteristics during the hiring process and must have legitimate business reasons for making employment decisions that are unrelated to these protected characteristics.

North Carolina does not have any laws prohibiting employers from asking an applicant about his or her salary history. Pay equity, the requirement that men and women receive equal pay for equal work, is governed by the Federal Equal Pay Act.

Covenants not to compete are generally disfavored, but are enforceable in North Carolina when they are reasonable. To be enforceable, a covenant not to compete must be:

  • in writing;
  • part of an employment contract or sale of a business;
  • based on valuable consideration (which cannot be solely continued at-will employment);
  • reasonably necessary for the protection of the company’s interests; and
  • reasonable in time and geographic scope.

If the restrictive covenant is not entered into at the start of employment, employers must provide other valuable consideration including, for example, a raise, promotion, or bonus.

North Carolina courts may modify or "blue-pencil" the scope, territory, or time of a non-competition agreement deemed to be unreasonably broad by striking out the unreasonable provisions. Non-competition provisions that are overbroad are not rewritten or enforced.

Agreements with employees protecting the confidentiality of business information that are limited to a company’s legitimate business interests do not need to be limited by time or geographic area. Violations of these types of covenants are analyzed under normal breach of contract law.

Employers should be mindful that, when conducting medical inquiries, temperature checks, or other screening processes to detect COVID-19 cases and prevent the spread of the disease in the workplace, all such medical information gathered on an employee should be treated as a confidential medical record and maintained in compliance with the Americans with Disabilities Act. For instance, such medical information should be stored in a separate, confidential file apart from the employee’s personnel file. In the event an employee tests positive for COVID-19, the employer should not share the identity of that employee, but may alert employees, especially those who came in contact with the infected employee, that a positive case was detected so they can get tested or quarantine, as appropriate, to protect their health and safety.

The North Carolina Equal Employment Practices Act prohibits employers who regularly employ 15 or more employees from discriminating against employees based on race, religion, color, national origin, age, sex or handicap (N.C. Gen. Stat. § 143-422.2). On the federal level, in 2020 the Supreme Court of the United States held that Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sexual orientation and gender identity. 

The Persons With Disabilities Protection Act (PWDPA) prohibits employers who regularly employ 15 or more employees from taking adverse employment action against a qualified person with a disability on the basis of that disability. Damages under the PWDPA include back pay and declaratory or injunctive relief (N.C. Gen. Stat. § 168A-1, et seq).

With certain limited exceptions, NCDOL adopts Federal Occupational Safety and Health Act (OSHA) standards almost verbatim. In response to the COVID-19 pandemic, several federal agencies, including the Centers for Disease Control and Prevention, the Occupational Safety and Health Administration, and the US Equal Employment Opportunity Commission have all issued extensive guidance on keeping the workplace safe and preventing the spread of the disease. 

Such guidance includes workplace assessments to evaluate where employees are mostly likely to come in contact with or spread the virus, appropriately handling COVID-19 cases amongst employees, and workplace measures to assist with preventing spread of the disease – for example, work from home plans, social distancing, face masks, routine handwashing, use of sanitizers, reducing traffic or use of common areas, and eliminating large gatherings and meetings. Employers should review and implement this federal guidance to protect their employees and prevent the spread of COVID-19.

The North Carolina Workers’ Compensation Act requires all businesses that employ three or more employees, including those operating as corporations, sole proprietorships and limited liability companies and partnerships, obtain workers’ compensation insurance or qualify as self-insured employers for the purpose of paying workers’ compensation benefits to their employees. Exceptions to this requirement include:

  • employees of certain railroads;
  • casual employees – ie, persons whose employment is both casual and not in the course of the trade, business, profession or occupation of the employer;
  • domestic servants directly employed by the household;
  • farm laborers when fewer than ten full-time, non-seasonal farm laborers are regularly employed by the same employer;
  • federal government employees in North Carolina; and
  • "sellers of agricultural products for the producers thereof on commission or for other compensation, paid by the producers, provided the product is prepared for sale by the producer".

If a company subcontracts work to a subcontractor who does not have workers’ compensation insurance, that company may be liable for the work-related injuries of the subcontractor’s employees, regardless of the number of employees the company or the subcontractor employs.

North Carolina passed An Act to Provide Limited Immunity from Liability for Claims Based on Transmission of Coronavirus Disease 2019 (Act), which bars liability for any claim arising from any act or omission alleged to have resulted in the contraction of COVID-19 that does not amount to gross negligence, willful or wanton conduct, or intentional wrongdoing. The Act only applies to claims arising no later than 180 days after the expiration or rescission of the state’s March 10, 2020 Declaration of a State of Emergency to Coordinate Response and Protective Actions to Prevent the Spread of COVID-19. To take advantage of this immunity, employers should publish the actions they are taking to reduce the risk of transmission of COVID-19. This limited immunity does not apply to claims arising under the North Carolina Workers’ Compensation Action. 

Employers in North Carolina must follow federal laws with respect to health plans, including the Employee Retirement Income Security Act (ERISA), the Patient Protection and Affordable Care Act (ACA), and the Consolidated Omnibus Budget Reconciliation Act (COBRA). In addition, North Carolina has a "mini-COBRA" statute applicable to insured group policies, including those of small businesses that are not subject to federal COBRA provisions.

North Carolina’s mini-COBRA statute generally provides for continuation of group hospital, surgical and major medical coverages (N.C. Gen. Stat.§ 58-53-5) for up to 18 months after termination of employment or loss of eligibility (N.C. Gen. Stat. § 58-53-35).

In North Carolina, employment is presumed to be at-will. Employers can terminate at-will employees for any lawful reason. Severance payments upon termination are not required and may be the subject of agreement between the parties (either at the time of contracting or at the time of termination). If the employer enters into a contractual employment relationship with an employee for a term, the agreement should set out the terms for termination in detail, including what happens if a change of control occurs, what constitutes cause to terminate the employee, when and if the employee can resign with good reason and the types of payments that are due under each type of termination. 

In general, employers are not required to provide notice before termination, unless otherwise required by contract or by the Federal Worker Adjustment and Retraining Notification Act.

In addition to any claims available to employees under federal law, North Carolina recognizes a common law claim for wrongful discharge in violation of public policy. This North Carolina claim is limited to discriminatory terminations (it does not cover harassment claims or discrimination that does not involve employment termination) and does not protect against retaliation.

North Carolina’s Human Relations Commission does have the authority to receive charges of discrimination or retaliation; however, the powers of the Human Relations Commission are limited to investigation and conciliation. Discrimination claims under federal law are filed and investigated in the first instance by the Federal Equal Employment Opportunity Commission. Claims alleging discrimination based on state laws can be filed directly in state court.

North Carolina law prohibits discrimination based on lawful use of lawful products, with certain limited exceptions (N.C. Gen. Stat. § 95-28.2). Specifically, this statute prohibits employers from failing or refusing to hire a person, or discharging or otherwise discriminating against any employee with respect to any term or condition of employment, because that person or employee engages in or has engaged in the lawful use of lawful products if the activity:

  • occurs off the employer’s premises;
  • occurs during non-working hours; and
  • does not adversely affect the employee’s job performance or the person’s ability to properly fulfill the responsibilities of the position in question or the safety of other employees.

As a result of COVID-19, the US Equal Employment Opportunity Commission published guidance for employers on detecting, preventing, and handling pandemic-related harassment due to national origin, race, or other protected characteristics. This guidance assists employers with reducing the chances of workplace harassment as employee fears related to the pandemic can sometimes be misdirected against individuals with protected characteristics. 

The wage and hour provisions in North Carolina generally mirror those established by the federal government through the Fair Labor Standards Act. Employers are not required to provide paid time off or holidays under state law. There is no requirement that employees be compensated for accrued, unused vacation time upon termination of employment, unless the employer is contractually obligated to provide such payments under a policy, practice or agreement. Absent a written provision to the contrary, accrued but unused sick time is presumed to be forfeited at termination of employment. It is strongly recommended employers include clear, written forfeiture provisions in a handbook or other employment document. In general, ambiguities will be construed against the employer.

Wage and hour claims may be filed with the N.C. Department of Labor’s Wage and Hour Bureau; however, filing with the agency before initiating a claim in court is not required.

The North Carolina Wage and Hour Act (N.C. Gen. Stat. § 95-25.1, et seq) and accompanying regulations (13 NCAC 12.0101, et seq) are the primary sources of state wage and hour law. These laws require, among other things:

  • written notice of promised wages and the date and place for payment of wages at the time of hire;
  • 24 hours’ advance written notice of reductions in pay during employment; and
  • written policies on forfeiture of vacation, bonus and commission.

The statutes and regulations also contain youth employment rules.

Commission and bonus programs are construed against the employer when ambiguous.

The North Carolina Wage and Hour Act provides for double damages, attorney’s fees and civil penalties.

Final pay must be made on the next regular payday following termination (N.C. Gen. Stat. § 95-25.7). However, wages based on bonuses, commission, or other forms of calculation may be paid on the first regular payday after the amount can be calculated.

There are also detailed rules about withholding wages and making deductions from wages (N.C. Gen. Stat. § 95-25.8). When the amount or rate of the deduction is known and agreed on in advance, the employer must have a written authorization, signed on or before the payday from which the deduction will be made, which indicates the reason for the deduction, and states the dollar amount or percentage of wages to be deducted.

If the deduction is made for the employee’s convenience, the employee must be given a reasonable opportunity to withdraw the authorization. When the amount of the proposed deduction is not known in advance, the employer must obtain a written authorization which is signed before the payday on which the deduction is to be made and indicates the reason for the deduction. Before making a deduction, the employee must be given written notice of the amount of the deduction and his or her right to withdraw the authorization and a reasonable opportunity to withdraw the authorization.

Any withholding of wages for the employer’s benefit must also meet the following requirements.

  • In weeks without overtime, wages may not be reduced below minimum wage.
  • In weeks with overtime, deductions may be made only from wages for non-overtime hours, which may not be reduced below minimum wage. No deduction can be made from overtime.
  • An employer may withhold from wages for cash shortages, inventory shortages, or loss or damage to the employer’s property, provided the deduction limitations of the minimum wage and/or time and one-half overtime pay are met and the employee is given seven days’ prior written notice of the amount of the deduction.
  • The seven-day rule does not apply when the deduction is made from the wages of a terminated employee.
  • If the employee is charged with a crime as the result of a cash shortage, inventory loss, or loss or damage to the employer’s property, no written authorization is required, but the deduction must comply with the rules regarding deduction limitations of the minimum wage and time and one-half overtime pay. If the employee is found not guilty, any amounts withheld must be reimbursed to the employee.
  • Loans or advances of wages are not subject to the written authorization rules.

Minimum wage is the same as required under the Fair Labor Standards Act, currently USD7.25 per hour.

An employer must pay one-and-a-half times the regular rate of pay for each hour worked over 40 hours in the working week (N.C. Gen. Stat. § 95-25.4). However, employees of seasonal amusement or recreational establishments receive overtime only after working more than 45 hours in the working week. Businesses “engaged in commerce or in the production of goods for commerce”, as defined in the Fair Labor Standards Act (FLSA), are exempt from the overtime and minimum wage provisions of the state Wage and Hour Act (but will be covered by the overtime requirement of the FLSA). There are several other exemptions for specific industries (listed in N.C. Gen. Stat. § 95-25.14).

Wage issues that may arise with respect to the COVID-19 pandemic include accurately tracking time worked for hourly employees working remotely, monitoring remote employees to ensure they are actually working all the time recorded, and expense-reimbursement for equipment and services employees use to work remotely. To address such issues, electronic time-keeping systems that can record every minute an employee works can be implemented to allow hourly employees to log/clock-in and log/clock-out at the beginning and ending of each shift. In addition, employers can implement electronic software to ensure employees are actually working when logged/clocked-in. 

With respect to expenses incurred as a result of remote work arrangements, employers may require employees working from home to cover such expenses (eg, computer and office equipment, electricity, internet, etc), so long as the cost of the business expenses do not reduce the employee’s earnings below the required minimum wage or overtime compensation.

In response to the COVID-19 pandemic, the federal government passed the Families First Coronavirus Response Act (FFCRA), which generally requires employers with fewer than 500 employees to provide paid leave to employees missing work for a COVID-19-related reason.

Under the FFCRA, employees are entitled to up to two weeks (80 hours) of paid leave at 100% of their regular rate of pay (up to USD511 daily and USD5,110 total) if they miss work because they:

  • (1) are subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • (2) have been advised by a healthcare provider to self-quarantine related to COVID-19; or
  • (3) are experiencing COVID-19 symptoms and seeking a medical diagnosis.

Alternatively, employees are entitled to up to two weeks (80 hours) of paid leave at two-thirds of their regular rate of pay (up to USD200 daily and USD2,000 in total) if they miss work because they:

  • (4) are caring for an individual subject to an order described in (1) or self-quarantine as described in (2), above;
  • (5) are caring for their children whose schools or places of care are closed (or childcare providers are unavailable) due to COVID-19-related reasons; or
  • (6) are experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services. 

An employee who has been employed for at least 30 days prior to the leave request can take an additional ten weeks of paid leave at two-thirds of their regular rate of pay (up to USD200 daily and USD2,000 in total) for reason (5) above (to care for their child whose school or place of care is closed, or if their childcare provider is unavailable due to COVID-19-related reasons).

Eligible employers providing such paid leave under the FFCRA are entitled to a fully refundable tax credit equal to the required paid leave. Small businesses with fewer than 50 employees may be able to seek an exemption from certain FFCRA leave requirements involving providing leave for employees to care for their children whose schools or places of care are closed due to COVID-19 if such leave would jeopardize the viability of the business as a going concern.

The Retaliatory Employment Discrimination Act (REDA) limits an employer’s right to terminate an employee for conduct protected by the statute. A claim under REDA can be filed with NCDOL before initiating a legal proceeding, but such filing is not required. Aggrieved employees – or NCDOL – may seek civil damages or injunctive relief when an employer discharges, suspends, demotes, relocates or takes action adverse to the employment interests of an employee when that employee files or threatens to file a claim or a complaint or takes other protected actions. Examples of protected activities include an employee exercising or threatening to exercise his or her rights under North Carolina’s:

  • Workers’ Compensation Act;
  • Wage and Hour Act;
  • Occupational Safety and Health Act (OSHA); or
  • Mine Safety and Health Act.

Other whistle-blower protections exist under various federal laws including, for example, the Sarbanes-Oxley Act, the FDA Food Safety Modernization Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

With regard to the COVID-19 pandemic, on the federal level, OSHA prohibits employers from retaliating against workers for filing a safety or health complaint with OSHA, making a health and safety complaint to their employers, participating in an inspection by OSHA, or reporting a work-related injury or illness. Employees who feel they have been retaliated against for expressing or reporting workplace safety or health concerns related to exposure to the virus can file a complaint with OSHA.

North Carolina does not have any laws that require discrimination and harassment training in the workplace. However, employers should conduct such training to prevent discrimination and harassment and to provide the appropriate tools to employees to detect and handle such issues. 

On May 21, 2018, the US Supreme Court ruled arbitration agreements between employees and employers requiring individual arbitration must be enforced. In light of this decision, employers can require employees to enter into contracts waiving their class and collective action rights in addition to their right to bring employment claims in court.

In addition to the relief available for federal employment claims, employees may recover civil damages for wrongful discharge claims based on North Carolina state law, including emotional distress and punitive damages. Unlike federal law, damages under North Carolina law for wrongful discharge are not subject to a cap, but attorneys’ fees cannot be recovered.

Poyner Spruill

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Poyner Spruill has a labor and employment practice group that consists of seven partners, two associates, and one of counsel, spread across three of the firm’s four office locations – Charlotte, Raleigh, and Rocky Mount, North Carolina. In addition, Poyner Spruill boasts a separate employee benefits practice group that consists of three partners, and two associates, based out of the firm’s Charlotte and Raleigh offices. The firm primarily focuses on two areas of employment law: defense of administrative and judicial claims by employees and proactive workplace management. The labor and employment practice group helps clients establish practical and useful employment policies, advises on the day-to-day implementation of policy and employment laws, and assists in difficult situations involving disciplinary action, termination, employee counseling, FMLA and ADA leave requests, employee violence, privacy, disability and religious accommodation, internal complaints of discrimination, retaliation, harassment, and other complex issues.

There have been several changes to US employment law in response to the COVID-19 pandemic. On a federal level, those changes have focused on leave laws and guidance regarding workplace accommodations. North Carolina has also temporarily revised its unemployment law.

Temporary Leave Entitlements in the Wake of COVID-19

Specifically, the Families First Act Coronavirus Response Act (the “Act”) was passed by Congress to provide new temporary employee leave entitlements under the Emergency Family Medical Leave Expansion Act (EFMLA) and the Emergency Paid Sick Leave Act (EPSLA). The Act is effective April 1, 2020 through December 31, 2020. Private employers with fewer than 500 employees and most public employers are subject to the leave requirements of the Act. Employees who have worked for an employer for at least 30 days are entitled to EFMLA leave. There is no similar requirement for EPSLA leave; employees are eligible for leave under that provision immediately upon hire.

Healthcare providers and emergency responders

Employers can elect to exclude healthcare providers and emergency responders from the benefits provided under the EPSLA and EFMLA. For purposes of determining whether employees are “healthcare providers” which can be exempted from the EPSLA and EFMLA, the Department of Labor guidance defines healthcare provider expansively, stating a “healthcare provider” is anyone employed at any doctor’s office, hospital, healthcare center, clinic, post-secondary educational institution offering healthcare instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home healthcare provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.

"Emergency responders" are defined as employees who are necessary for the provision of transport, care, healthcare, comfort, and nutrition of patients, or whose services are otherwise needed to limit the spread of COVID-19. This includes military or national guard, law enforcement officers, correctional institution personnel, firefighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency, as well as individuals who work for facilities employing these individuals and whose work is necessary to maintain the operation of the facility. This also includes any individual who the highest official of a state or territory, including the District of Columbia, determines is an emergency responder necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.

Small businesses

Additionally, the EFMLA contains a provision empowering the Secretary of Labor to exempt small businesses with fewer than 50 employees from the requirements of the EFMLA if it would jeopardize the viability of the business. An employer, including a religious or non-profit organization, with fewer than 50 employees is exempt from providing (i) paid sick leave due to school or place of care closures or childcare provider unavailability for COVID-19-related reasons and (ii) expanded family and medical leave due to school or place of care closures or childcare provider unavailability for COVID-19-related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:

  • the provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  • the absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
  • there are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Eligible employees

Under the EFMLA, eligible employees who are unable to work (or telework) because they need to care for a child under 18 because the child’s school or place of care has been closed, or the childcare provider is unavailable due to the COVID-19 emergency, can take up to 12 weeks of leave. Employees who need to take leave for other reasons not covered by the EFMLA, including leave to care for themselves or a family member due to COVID-19 may still be eligible under the FMLA’s standard provisions for unpaid leave.

Under the EPSLA, eligible employees can take two weeks of paid leave for the following reasons:

  • if the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • if the employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
  • if the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • if the employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or who has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
  • if the employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or their childcare provider is unavailable, due to COVID-19 precautions; and/or
  • if the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Under the EFMLA, employees who have worked for an employer for at least 30 days are entitled to up to 12 weeks of job-protected leave. The first ten days of EFMLA leave are unpaid. The employee has the option, but cannot be required, to use vacation, paid time off, or EPSLA (if eligible) to receive pay during the first ten days of EFMLA. After ten days of unpaid EFMLA, where additional leave is needed, employees will receive paid leave for the remaining ten weeks that will be no less than two-thirds of the employee’s usual pay based on the employee’s regular work schedule, up to USD200 per day and no more than USD10,000 in total. For employees with varying schedules, the EFMLA provides that the pay will be equal to the average number of hours per day that the employee was scheduled to work over the previous six-month period.

Under the EPSLA, full-time employees are entitled to up to 80 hours of job-protected leave. Proposed regulations guidance from the DOL clarifies that a full-time employee is one who is regularly scheduled to work at least 40 hours per week. Therefore, if an employee is regularly scheduled to work fewer than 40 hours, they are a “part-time employee” and their entitlement under the EPSLA is the number of hours the employee is regularly scheduled to work in a two-week period. Proposed regulations have added new guidance for computing the number of hours of EPSLA for a part-time employee with a varying schedule.

Workplace Issues Related to COVID-19

The U.S. Equal Employment Opportunity Commission has also been proactive since the start of the pandemic and published compliance guidance to employers regarding the application of various federal EEO laws to workplace issues related to COVID-19 – What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws. This online technical assistance publication has been updated several times by the EEOC to address new questions that have arisen since the pandemic began. Employers should monitor this publication for further updates on a regular basis, as additional issues on this subject are addressed.

North Carolina’s unemployment regulations were revised as a result of the COVID-19 pandemic, requiring employers to provide the following specific notice to North Carolina employees upon separation of employment:

  • unemployment insurance benefits are available to workers who are unemployed and who meet the state’s eligibility requirements;
  • employees may file a claim in the first week that employment stops, or work hours are reduced;
  • employees may file claims online at the Division of Employment Security (DES) – des.nc.gov – or by telephone at (888) 737-0259;
  • employees must provide the DES with the following information for the DES to process the claim: full legal name, social security number, and authorization to work (if the employee is not a US citizen or resident);
  • employees may contact the DES at (888) 737-0259 and select the appropriate menu option for assistance.

This notice should be provided when an employee is separated from employment and to employees whose hours are reduced.

Federal and state governments continue to consider additional legislation to stimulate the economy and support the workforce during the COVID-19 pandemic. Election of the President and other state and federal legislators occurs in the Fall of 2020 and will have a significant impact on the future of employment law in the USA and any additional short-term measures to deal with the impacts of COVID-19 on the workplace. 

Poyner Spruill

301 Fayetteville Street
Suite 1900
Raleigh
N.C. 27601
USA

+1 (919) 783 6400

+1 (919) 783 1075

www.poynerspruill.com
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Law and Practice

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Poyner Spruill has a labor and employment practice group that consists of seven partners, two associates, and one of counsel, spread across three of the firm’s four office locations – Charlotte, Raleigh, and Rocky Mount, North Carolina. In addition, Poyner Spruill boasts a separate employee benefits practice group that consists of three partners, and two associates, based out of the firm’s Charlotte and Raleigh offices. The firm primarily focuses on two areas of employment law: defense of administrative and judicial claims by employees and proactive workplace management. The labor and employment practice group helps clients establish practical and useful employment policies, advises on the day-to-day implementation of policy and employment laws, and assists in difficult situations involving disciplinary action, termination, employee counseling, FMLA and ADA leave requests, employee violence, privacy, disability and religious accommodation, internal complaints of discrimination, retaliation, harassment, and other complex issues.

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Author



Poyner Spruill has a labor and employment practice group that consists of seven partners, two associates, and one of counsel, spread across three of the firm’s four office locations – Charlotte, Raleigh, and Rocky Mount, North Carolina. In addition, Poyner Spruill boasts a separate employee benefits practice group that consists of three partners, and two associates, based out of the firm’s Charlotte and Raleigh offices. The firm primarily focuses on two areas of employment law: defense of administrative and judicial claims by employees and proactive workplace management. The labor and employment practice group helps clients establish practical and useful employment policies, advises on the day-to-day implementation of policy and employment laws, and assists in difficult situations involving disciplinary action, termination, employee counseling, FMLA and ADA leave requests, employee violence, privacy, disability and religious accommodation, internal complaints of discrimination, retaliation, harassment, and other complex issues.

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