North Carolina Tipped Minimum Wage Decrease

In the state of North Carolina, the minimum wage for tipped employees has been reduced from $2.43 per hour to $2.13 per hour on July 24, 2008.

On July 24, 2008, the federal minimum wage has increased from $5.85 per hour to $6.55 per hour. At the same time, the minimum wage for tipped workers in North Carolina has been $2.13 per hour, 30 cents less than before.

According to the North Carolina Department of Labor, employers are permitted to take a tip credit of up to $4.42 per hour. That amount is unchanged when a worker puts in overtime. So a cash wage of at least $5.41 per hour must be paid to a tipped employee, when working overtime.If the employee averages less than $4.42 per hour in tips, the employer must make up the difference in cash wages.

It is surprising for any North Carolina employers to know that tipped workers are entitled to overtime pay when they work more than 40 hours per week. When a tipped employee works overtime, he or she must be paid 1.5 times the minimum wage of $6.55 per hour. That’s $9.83 per hour.