Section 1

Current law, GS 95-25.3(a), sets the minimum wage that every employer must pay to each employee who performs any work during any workweek at the higher of $6.15 per hour or the minimum wage set forth in 29 USC 206(a)(1) (the Fair Labor Standards Act, which may change with time), except as otherwise provided in the statute.

This act increases the state's minimum wage in three phases. Effective January 1, 2024, sets the minimum wage at the higher of $10.35 per hour or the minimum wage set forth in 29 USC 206(a)(1). Effective January 1, 2025, sets the minimum wage at the higher of $15.00 per hour or the minimum wage set forth in 29 USC 206(a)(1). Beginning September 1, 2025, requires an annual adjustment by the Commissioner of Labor, calculated as specified. 

Eliminates the remaining content of GS 95-25.3, except existing subsection (f), which permits tipped employees to have tips counted as wages up to a certain federally specified limit. 

Section 2

Further amends GS 95-25.3, setting a statutory cap on the amount of tips earned by tipped employees that can be counted as wages at $6.50 per hour. Eliminates employee notice and employer record keeping requirements. Effective January 1, 2024, until December 31, 2024. Gradually increases the statutory cap, further amending the statute effective for the following specified terms: $9.50 per hour, effective January 1, 2025, until December 31, 2025; $12.50 per hour, effective January 1, 2026, until December 31, 2026; and $15.00 per hour, effective January 1, 2027, until December 31, 2027 . Further amends the statute, effective January 1, 2028, setting the minimum wage rate of a tipped employee at the amount set by the Commissioner of Labor as annually adjusted, with no tips counted as wages. Bars reducing an employee's wages under a tip pooling arrangement. 

Section 3

Amends GS 95-25.14 to no longer exclude the following individuals from the provisions of GS 95-25.3 (Minimum Wage); GS 95-25.4 (Overtime); GS 95-25.5 (Youth Employment); and GS 95-25.15(b) (Record Keeping): (1) any persons employed in agriculture, as defined by federal law; (2) any person employed as a domestic, including baby sitters and companions, as defined by federal law; and (3) persons confined in and working for any penal, correctional, or mental institution of State or local government. Makes clarifying and technical changes.