Is it legal for your boss to take your tips? What to know about NC minimum wage laws

North Carolina law requires employers to pay tipped employees at least $2.13 per hour.Photo byBlake WiszonUnsplash

In North Carolina, many workers depend on tips to supplement their income. It's important to understand your rights regarding tips, wages, and employer practices.

But is it legal for your boss to take them?

A North Carolina resident recently posted on Reddit about a situation in which his girlfriend’s boss withheld her tips as a punishment for being late.

North Carolina has laws on whether your boss can take your tips, the minimum wage you can earn with tips and tip pooling. Here’s what to know.

Can Your Boss Take Your Tips in NC?

• Prohibited by Law: Under the Fair Labor Standards Act (FLSA), managers and supervisors cannot take employees' tips.
• Direct Tips Only: Managers and supervisors can only keep tips they receive directly from customers for services they personally provide.

Minimum Wage for Tipped Employees

• Base Pay: Employers in North Carolina must pay tipped employees at least $2.13 per hour.
• Minimum Wage Requirement: Total earnings (base pay + tips) must equal or exceed the federal minimum wage of $7.25 per hour. If not, the employer must make up the difference.
• Tip Credit: Employers can claim a credit for the amount of tips earned by employees toward the minimum wage requirement, but employees must be notified in advance and allowed to keep all their tips.

Tip Pooling

• Legality: Tip pooling is legal if employees retain 85% of their tips. The remaining 15% typically goes to support staff (e.g., bussers, hosts).
• Record-Keeping: Employers must maintain accurate records of tips received and the amounts distributed under the tip pooling arrangement.

Filing a Wage Complaint

If you believe your tips are being wrongfully withheld or your wages are incorrect, you can file a complaint with the U.S. Department of Labor.

To file a complaint, provide:

• Your name, address, and phone number
• The company’s name, location, and phone number
• Manager or owner’s name
• Type of work performed
• Payment details (how and when paid)
• Additional information such as pay stubs or personal records of hours worked

Filing Methods:

• Online: Fill out a form at dol.gov
• Phone: Call 1-866-487-9243

Understanding these laws and your rights can help ensure fair treatment and proper compensation for your work.