The rules that outline hourly and overtime pay for tipped employees are much more complicated than those for employees who do not receive tips. This makes it difficult to know whether you are entitled to overtime pay if you are a tipped restaurant server, when you should receive it, and how much is due to you. If you work as a server, bartender, or other tipped employee, your employer must pay you according to these rules. This includes overtime if you work more than 40 hours in a single work week.
If you are a tipped employee and believe you have unpaid overtime wages, get Phil Gibbons Law on your side. We understand the complex laws and calculations used to determine how much your wages should be, and can help you get those wages. We will fight for the unpaid overtime you deserve. Call our Charlotte office today at 704-612-0038 to learn more.
How Does Pay Work for Tipped Employees in North Carolina?
Employers can pay tipped employees as little as $2.13 an hour, but they must ensure these employees receive enough tips to take home at least the minimum wage of $7.25 per hour. If you earn less than $7.25 an hour including your tips, your employer must increase your hourly wage to ensure you reach this minimum wage.
For example, if you normally receive an hourly wage of $2.13 an hour, but your restaurant has a slow week and you only average $4 an hour in tips, your employer will need to increase your hourly wage to make up the difference. This means it will take your rate of pay for the week ($2.13 + 4 = $6.13) and subtract it from the $7.25 minimum wage. This gives you an additional $1.12 per hour your employer will need to pay you for each hour worked this week.
This is important to know both to ensure you are receiving the full amount due to you, and because both your hourly wage and your tips make up your regular rate of pay, which your employer should use to calculate your overtime pay.
Your employer is under an obligation to maintain accurate records of the tips received by each employee, and you need to sign off on these records regularly. This rule is in place not only for ensuring you receive at least minimum wage and for calculating overtime pay, but for tip pooling as well.
How Must Employers Calculate Overtime Pay for Tipped Employees?
When a tipped employee works more than 40 hours a week, she must receive overtime wages. Just like for other exempt employees, this overtime rate should be equal to time and one-half of her regular rate of pay. In the case of a tipped employee, this regular rate of pay is her hourly wages plus the amount of tips per average she earned during the week in question.
Because the employer can take a tip credit based on the amount earned in tips, though, these calculations quickly become complicated. Some employers may cut corners, pay you time and a half based only on your hourly wage, or fail to pay tipped employees overtime at all.
Consider this situation: A server receives $2.13 an hour in wages, and makes an average of $10 in tips each hour. If she works 50 hours, how much overtime will she receive?
To calculate this, her employer would need to determine her regular hourly pay based on the minimum wage. She worked 50 hours at $7.25 an hour, (10 of those hours being overtime). So, her employer would take the $362.50 and add an extra half ($3.63) to the 10 hours of overtime. This gives a total of $398.80.
But then there is the matter of the tip credit to the employer. The employer can take a credit of $5.12 per hour since the employee actually averaged $10 in tips an hour. Multiply this credit times the 50 hours worked, and the employer’s credit is $256. Then subtract this credit from the total of $398.80, and you will come up with $142.80 the employer needs to pay the server for the 50 hours worked.
What Can I Do If I Believe I Have Unpaid Overtime Wages in North Carolina?
If you believe your employer failed to pay all the overtime wages due to you, or is calculating your overtime pay incorrectly, you need a knowledgeable North Carolina employee rights lawyer on your side. These rules are complicated, and the calculations complex. However, we offer free case reviews and can help you understand if you have a claim against your employer or a former employer.
We can often help employees recover their unpaid wages without filing a lawsuit or taking their case to court. Usually employers are willing to make things right without resorting to litigation. However, we are not afraid to take on a corporation of any size if it means getting the wages our clients need and deserve.
Phil Gibbons, Charlotte, NC Employee Rights Lawyer, Can Help Tipped Servers Recover Unpaid Wages
If you need help getting the full amount of overtime wages you deserve, run your case by employment lawyer Phil Gibbons. Call our office today at 704-612-0038 to schedule your free initial consultation, and we can get to work recovering the money due to you. We handle all cases on a contingency basis, so you pay nothing until we collect unpaid wages on your behalf.