North Carolina Minimum-Wage and Tip-Credit Rules: What Hospitality Workers Need to Know

North Carolina Minimum-Wage and Tip-Credit Rules: Key Takeaways

• North Carolina’s minimum wage matches the federal rate at $7.25 per hour as of August 2025
• Tipped employees may be paid a base wage of $2.13 per hour with tips making up the difference to reach $7.25
• Employers must notify employees of tip credit usage, ensure employees keep all their tips except in valid tip pools, and maintain accurate tip records

Understanding North Carolina’s minimum wage and tip-credit laws is essential for hospitality workers to ensure fair pay and for employers to remain compliant.

This guide explains the key aspects of tip credits, employer obligations, and tip pooling regulations in the state.

1. Overview of North Carolina Minimum Wage and Tip-Credit Rules

North Carolina follows the federal minimum wage standard which has been $7.25 per hour since 2009.

For tipped employees—such as servers and bartenders—the state permits employers to pay a lower base cash wage of $2.13 per hour. This wage is supplemented by the employees’ tips so that the total earnings reach at least the $7.25 minimum wage threshold.

If an employee’s tips do not make up the difference to $7.25, the employer must pay the remaining amount to comply with wage laws.

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2. Tip Credit and Employer Obligations in North Carolina

Employers can legally take a tip credit of up to $5.12 per hour, which is the difference between $7.25 and the $2.13 cash wage for tipped employees.

However, to lawfully apply this tip credit, employers must meet several important obligations:

• Employee notification: Employers must clearly inform tipped employees about the tip credit provisions. This includes explaining the amount of base cash wage the employee will receive and how tips will be used to make up the rest of the minimum wage.
• Tip retention: Employees must retain all their tips except when tips are pooled in a valid tip-pooling arrangement. Employers cannot withhold tips or require employees to share tips outside of these rules.
• Record-keeping: Employers are required to keep accurate records of the tips reported by each employee. This is often done through employee certifications of tips on a monthly or per-pay-period basis.

Failure to comply can lead to wage and hour violations and legal penalties.

For detailed guidance on how to comply with these regulations, see hospitality job posting compliance.

3. Tip Pooling Rules for Hospitality Workers in North Carolina

Tip pooling is permitted in North Carolina but only among employees who customarily receive tips, such as servers and bartenders.

The state limits contributions to the tip pool to a maximum of 15% of each employee’s tips to help ensure fairness and protect employee earnings.

Employers must be careful to structure tip pools fairly and ensure that only eligible employees participate in receiving and contributing to these pools.

Learn more about effective tip pooling systems that help hospitality employers manage tip distribution.

Valid Tip Pooling Participants

Typically, employees eligible to participate in tip pools include:

• Servers
• Bartenders
• Bussers (if customary)

Employees who generally do not receive tips, such as kitchen staff or managers, should not be included in the tip pool.

Employers can also reference the busser job description for understanding tip roles.

4. Legislative Developments Affecting Tip Credits in North Carolina

In recent years, legislation such as House Bill 850 proposed increasing the tip credit to raise the base cash wage for tipped employees.

As of August 2025, this bill has not been enacted, so the current tip credit and minimum wage rules remain in effect unchanged.

Employers and hospitality workers should keep an eye on potential legislative updates that could affect wage and tip credit rules in the future.

Stay informed with expert advice on restaurant owner interview questions that can include discussions on legislative impacts.

5. Compliance and Enforcement for North Carolina Hospitality Workers

North Carolina employers are responsible for ensuring that tipped employees’ total earnings meet or exceed the $7.25 minimum wage including tips.

Proper compliance includes:

• Providing employees with prior notice about tip credit practices
• Maintaining accurate and detailed records of tips and wages
• Implementing tip pooling only as allowed and limiting contributions to 15%
• Making up any wages if tips fall short of the minimum wage

Failure to adhere to these requirements can result in back pay obligations, penalties, and legal action by regulators and employees.

For employers, resources on how to hire a bartender can be helpful given their tipped role.

6. Additional Resources on Minimum Wage and Tip-Credit Rules in North Carolina

For hospitality workers and employers seeking more detailed guidance, the following official resources provide authoritative information:

• U.S. Department of Labor: Minimum Wages for Tipped Employees
• North Carolina Department of Labor: Wage and Hour Information
• North Carolina General Assembly: House Bill 850

Employers may also find value in the guides on posting jobs for tipped employees to ensure legal and effective recruitment.

North Carolina Minimum-Wage and Tip-Credit Rules: Conclusion

North Carolina’s minimum wage and tip-credit laws maintain the federal standard rates, allowing hospitality workers to be paid a lower base wage supplemented by tips.

Employers must be diligent in notifying employees, ensuring tip retention, keeping accurate records, and adhering to tip-pooling rules to stay compliant.

By understanding these rules, hospitality workers can protect their earnings and employers can avoid legal risks, fostering a fair workplace environment.

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