What are the laws governing wages and tips for tipped employees?
In North Carolina, tipped employees are entitled to certain protections under state wage and hour laws. Tips must be retained by the employee and cannot be shared with managers or other employees unless a valid tip pooling agreement is in place. Tips must be reported to the employer, and the employer is responsible for paying the employee the minimum wage, which in North Carolina is currently $7.25 an hour. Tipped employees must be informed of the base wage for tipped employees and the employer must pay at least the minimum wage for tipped employees, which in North Carolina is currently $2.13 an hour. If an employer pays an employee a minimum wage of $2.13 an hour, then they must make up the difference between the minimum wage and the applicable rate if the employee’s tips, plus the hourly wage, do not amount to at least the minimum wage. In other words, the employer must make up the difference if the employee’s tips, plus the hourly wage, do not meet the minimum wage requirement. The employer must also post a notice in a conspicuous place that informs employees of their rights regarding the minimum wage. Additionally, the employer must provide a statement of earnings that shows the total number of hours worked, the total amount of tips received, and the hourly wage rate. Employers must also keep accurate records of all hours worked and wages due to employees for a minimum of three years, as required by the North Carolina Wage and Hour Bureau.
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