Tips, Tip Pools: Wage Info for Service Workers in NC

— Those working as servers in the restaurant industry often get tips from patrons. But are businesses allowed to pay less to an employee if they are tipped?

In North Carolina, employers are permitted to take credit for a certain amount of tips by employees and use that total toward the employee’s minimum wage, according to the North Carolina Department of Labor.This means that restaurants can pay servers a lower cash wage, as long as the amount of their tips bring that sever’s pay up to the minimum wage in the state, which is $7.25 per hour.

Businesses are required to maintain accurate and complete records of all tips received by each employee. That amount is supposed to be certified by the tipped employees each pay period or monthly.

Tip pools are another matter. If required to participate in a tip pool, the employee is supposed to retail at least 85 percent of the tips they receive.

In the case of overtime (those working more than 40 hours in a workweek), businesses are required to pay the employee one-and-one-half the current minimum wage. Employees earning tips will have the amount of tips received (only those that bring the employee’s total hourly rate up to minimum wage) deducted from their cash wages.

When contributing to a tip pool, employers may only take credit for the amount of tips each tipped employee ultimately receives, according to the U.S. Department of Labor.

Another note on tip pools: Tip pools and sharing arraignments may only include employees who regularly receive tips and serve customers – bussers, bartenders, bellhops and servers, according ot the Fair Labor Standards Act. Valid tip pools are prohibited from including employees who do not customarily and regularly receive tips, such as chefs, cooks, janitors, dishwashers.

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