labor lawAdivision of labor law center

Sure, we all know about the new minimum wage in North Carolina. That is old news at this point—how the state has raised the minimum wage in the state to $6.15 per hour. The law was passed by the North Carolina General Assembly and kicks into effect on January 1, 2007. Sheesh, I am still getting used to this New Year thing. I should have said that the minimum wage has already kicked into effect, right?

But even though the minimum wage in North Carolina is old news and employers have known about for weeks before the 2007 start up sate, that doesn’t mean employers don’t have questions about it and how it affects them and their employees in every circumstance and situation. One such circumstance and situation came to my attention in my voluminous reading that I do in order to keep all of you up to date in the human resources world.

I came across one such question that an employer had about tipped employees and the tip credit as it has to do with the new minimum wage in North Carolina. They asked whether or not the new minimum wage even affected their tipped employees and the tip credit.

The answer in short is “yes.” Tipped employees under the new minimum wage also get a $1 raise, from $2.13 to $3.13 per hour for employers who earn at least $3.02 in tips. In the event that an employee makes less than that in tips per hour, then it is up to the employer to compensate them with hourly raises in order that they make $6.15 per hour.

The tip credit comes into play because the North Carolina state wage and hour laws allow employers to take credit for a certain number of the wages that their employees earn in order to put it toward their payment of the minimum wage. But no matter what, employees must always be told ahead of time that their tips are to be put toward this tip credit and used by the employer to meet the minimum wage rates.

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