Bill Summary for S 447 (2021-2022)

Summary date: 

Mar 31 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 447 (Public) Filed Wednesday, March 31, 2021
AN ACT INCREASING THE STATE'S MINIMUM WAGE TO FIFTEEN DOLLARS PER HOUR OVER FIVE YEARS, THEN ANNUALLY ADJUSTING THE MINIMUM WAGE AUTOMATICALLY BY INCREASES IN THE COST OF LIVING; ENDING THE SUBMINIMUM WAGE FOR INDIVIDUALS WITH DISABILITIES; AMENDING THE SUBMINIMUM WAGE FOR TIPPED WORKERS; AND ENDING THE EXEMPTION FOR DOMESTIC WORKERS.
Intro. by Mohammed, Murdock, Mayfield.

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Bill summary

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 the five phases. Effective January 1, 2022, sets the minimum wage at the higher of $8.80 per hour or the minimum wage set forth in 29 USC 206(a)(1). Effective January 1, 2023, 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, 2024, sets the minimum wage at the higher of $12 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 $13.50 per hour or the minimum wage set forth in 29 USC 206(a)(1). Effective January 1, 2026, sets the minimum wage at the higher of $15 per hour or the minimum wage set forth in 29 USC 206(a)(1). Directs the Commissioner of Labor to calculate an adjusted minimum wage rate, beginning September 30, 2022, and on each September 30 thereafter, using the Consumer Price Index , CPI-U, or its successor index, as calculated by the US Department of Labor for the 12-month period preceding the previous September 1. Requires each adjusted minimum wage rate calculated to be published on September 30 and take effect on the following January 1.

Further amends GS 95-25.3 to eliminate the statute's provisions regarding lower wage rates for students, learners, apprentices, and messengers; persons whose earning or productive capacity is impaired by age or physical or mental deficiency or injury; persons economically disadvantaged or unemployed; and persons employed by seasonal food service establishments. 

Current law, GS 95-25.3(f), authorizes tips earned by tipped employees to be counted as wages up to the amount permitted in section 3(m) of 29 USC 203(m) (the Fair Labor Standards Act) if certain notice and recording requirements are met.

This act eliminates the reference to the Fair Labor Standards Act and instead establishes a statutory cap on the amount of tips earned by a tipped employee which can be counted as wages. Increases the cap in phases, eventually ending the practice of counting tips as wages and effectively establishing a minimum wage for tipped employees. Effective January 1, 2022, sets the initial cap at $5 per hour. Effective January 1, 2023, sets the cap at $6.50 per hour. Effective January 1, 2024, sets the cap at $8 per hour. Effective January 1, 2025, sets the cap at $9.50 per hour. For all of these phases, maintains the existing provision authorizing tip pooling so long as no employee's tips are reduced by more than 15% under the arrangement. 

Amends GS 95-25.14(a), removing domestic employees from persons exempt from minimum wage, overtime, youth employment, and record keeping laws, as specified. Makes clarifying and technical changes.

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