North Carolina Laws on Contract Labor
- Contract labor is strictly governed by the Department of Labor.firma contract 20309 image by pablo from Fotolia.com
In North Carolina, contract workers are employed through "private personnel services." Any business that is classified as a "private personnel service" (PPS) provides workers to businesses, government or individuals for a defined period of time to do a defined task for a specific amount of pay. Laws governing the treatment and payment of contract workers are covered in the Labor Law Code of the North Carolina Department of Labor. - Private personnel services are exclusively for-profit businesses that find work for independent contractors. There are several categories of businesses that are not considered private personnel services. These include: any business that does not charge a fee to find work for contractors, any such service operated by the state, county, city or local government, any temporary help service that does not advertise that contractors can potentially be hired full time with the company in which they have a contract, any newspaper or communications company that publicizes job listings, employment offices that only charge union dues and any temporary employment services that does not require a contract.
- Anyone operating a private personnel service must have a license. Licenses must be applied for through an office of the Department of Labor and approved by the Labor commissioner. All applicants will be screened for criminal history and previous business practices. If the criminal screening shows that any of the applicants are not in good moral or ethical standing, the application can be denied. If the license is approved, then the applicant will have to pay a $10,000 bond as a deposit. Applicants must allow supply a schedule of fees that the PPS will charge and the rules and regulations of the PPS.
- Independent contractors do not officially work for the PPS or the company where they will be working. They enter into a contractual agreement with the PPS to do work for another entity. If the contractor does not receive 80 percent of the agreed upon income, the person can file a complaint with the Labor commissioner. All contracts between a PPS and a contractor shall be in writing and should include the contractor name, the PPS name and contact information, the schedule of fees, the refund policy, the PPS official license information and the signatures of all parties. Records of job orders and contracts must be held for at least two years.
- It is illegal for a PPS to do any of the following activities: coerce or induce a contractor into terminating a position in exchange for another position not covered under the contract; publish any fraudulent or false information; advertise in the media without including the name of the PPS and the words "personnel service;" direct a contractor to contact an employer for work outside of the contractor; send a contractor to an employer that is known to violate state or federal minimum wage or child labor laws; or send a contractor to an employer that the PPS knows to conduct illicit or immoral activities.
- Violation of any of the laws in the above section or any other federal or state law will carry a penalty against the PPS. The Labor commissioner has the authority to conduct investigations and instruct law enforcement to assess penalties. Complaints against a licensed PPS must be made in writing. If the PPS is found to be in violation of laws, the license of the business can be suspended or revoked and the business will be required to pay an initial fine of no more than $250.
