North Carolina tip laws (2026)
North Carolina follows the federal numbers: a $7.25 minimum wage and a $2.13 tipped cash wage, so the tip credit is $5.12. Cities and counties can't set higher private-sector minimums. For businesses under state minimum-wage coverage, a tip pool can't take more than 15% of anyone's tips.
North Carolina at a glance
Tip credit allowedNorth Carolina: $7.25 an hour minimum wage. Tipped staff can be paid $2.13 cash, with up to $5.12 counted from tips.
| State minimum wage | $7.25/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $2.13 | Plus up to $5.12 in tips = $7.25.[1] |
| Max tip credit | $5.12 | Counted from tips.[2] |
| Tip pooling | Allowed | Mandatory pools allowed.[3] |
| Card-fee deduction | Pro rata only | Only the tip's share of the fee.[3] |
| Card tip payout | Card tips count when charged and are due by that pay period's payday.[3] | |
| Local minimum wages | None | State law blocks local rates.[4] |
Rates verified against the North Carolina Department of Labor, Wage and Hour Bureau on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in North Carolina?
In North Carolina you can take a tip credit of up to $5.12 an hour, can require staff to join a tip pool and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | Yes | Pay at least $2.13 cash and count up to $5.12 in tips. Tips must cover the gap.[1][2] |
| 02 | Make staff join a tip pool? | Yes | Allowed, as long as only eligible staff share.[3] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartender, busser, food runner and host: has to customarily and regularly get tips. Actual duties decide.[3][5] |
| 04 | Include cooks and dishwashers? | Depends | State-covered pools leave out kitchen-only staff who don't regularly get tips. Federal no-credit pools need a separate coverage check.[3][1] |
| 05 | Give managers or supervisors a share? | No | Under federal rules, managers and supervisors can't get pooled tips. Tips for service they alone provide are separate.[5] |
| 06 | Let an owner keep any of the tips? | No | Federally covered employers can't keep workers' tips. Owners with 20% equity who actively manage count as managers.[5] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | In state-covered businesses, a pool can't cut anyone's tips by more than 15%. Workers keep at least 85%.[4][1] |
| 08 | Take card processing fees out of tips? | Pro rata | Only the card issuer's actual fee on the tip, not on the meal or extra overhead.[3] |
| 09 | Hold card tips until payday? | Deadline | Card tips count when charged and are due by that pay period's payday.[3] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[3][5] |
| 11 | Keep a mandatory service charge for the house? | Federal rule | A required service charge isn't a tip, whatever it's called. Amounts promised to staff still have to be paid.[3][4] |
| 12 | Pay tips on a payroll card? | Depends | The state agency's page contemplates required cards. Federal rules separately bar forcing workers onto one. Offer another way to get paid too.[6] |
03State vs federal
North Carolina vs federal law
North Carolina follows the federal baseline on the rules below: $7.25 minimum wage, $2.13 tipped cash wage and up to $5.12 in tip credit.
| Rule | Federal (FLSA) | North Carolina | Comparison |
|---|---|---|---|
| Minimum wageSame as federal | Federal$7.25[5] | North Carolina$7.25[1] | Same as federal |
| Tipped cash wageSame as federal | Federal$2.13[5] | North Carolina$2.13[1] | Same as federal |
| Max tip creditSame as federal | Federal$5.12[5] | North Carolina$5.12[2] | Same as federal |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[5] | North CarolinaState law: more than $20 a month in tips. Federal law: more than $30 a month.[4] | State rule |
| Managers in the poolFederal applies | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[5] | North CarolinaUnder federal rules, managers and supervisors can't get pooled tips. Tips for service they alone provide are separate.[5] | Federal applies |
| Kitchen in the poolState rule | FederalCooks and dishwashers may join a nontraditional mandatory pool only when all workers receive a direct cash wage of at least the full federal minimum wage and no tip credit is taken; employer/managers/supervisors remain excluded. State law may be stricter.[5] | North CarolinaState-covered pools leave out kitchen-only staff who don't regularly get tips. Federal no-credit pools need a separate coverage check.[3][1] | State rule |
| Card fees from tipsSame as federal | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[5] | North CarolinaTip's share of the fee only[3] | Same as federal |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[5] | North CarolinaCard tips count when charged and are due by that pay period's payday.[3] | State rule |
| Mandatory service chargesState rule | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[5] | North CarolinaA required service charge isn't a tip, whatever it's called. Amounts promised to staff still have to be paid.[3][4] | State rule |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[5] | North CarolinaState law requires 1.5 times regular pay after 40 hours, but exempts many federally covered businesses. Federal overtime uses the full rate, minus the same credit.[5][4] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how North Carolina fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in North Carolina
In North Carolina employers can pay tipped staff $2.13 an hour and count up to $5.12 in tips toward the $7.25 minimum. If tips fall short, the employer makes up the difference.[1]
One server, one slow 30-hour week in North Carolina
A busy week with $153.60 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
- Tip credit conditions
- State-covered employers give notice first, let workers keep tips, and record weekly tips. Cash plus tips has to reach $7.25.[1][4]
- Who counts as tipped
- State law: more than $20 a month in tips. Federal law: more than $30 a month.[4]
- Overtime
- State law requires 1.5 times regular pay after 40 hours, but exempts many federally covered businesses. Federal overtime uses the full rate, minus the same credit.[5][4]
- Side work and dual jobs
- No state rule. Federal rule applies: current 29 CFR 531.56(e) is the restored 1967 occupation-based dual-jobs rule. No tip credit for a separate non-tipped occupation; related duties within the tipped occupation need not themselves produce tips. The vacated 2021 federal 80/20 and 30-continuous-minute limits are not current regulatory limits. FAB 2026-1 withdraws historical opinion letters and confirms WHD enforcement guidance no longer sets specific time limits; it is agency guidance, not a new statute or regulation.[7][8][3]
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Full-time students, learners, apprentices, messengersState definitions and coverage apply. Federally covered employers need separate federal approval. Rate set by formula: 90% of applicable state minimum, rounded down to lowest nickel.[4] | $6.55* |
* Worked out by Ferry from the formula, using the $7.25 state minimum wage. Not an official figure.
Scheduled increases
No statewide increase with a published amount is on file as of .
06Tip pool
Who can be in the tip pool in North Carolina
North Carolina allows tip pools, and employers can make them mandatory. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Bartender | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Busser | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Food runner | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Host | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Barback | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Expo | Depends | Has to customarily and regularly get tips. Actual duties decide.[3][5] |
| Back of house | ||
| Cook | Depends | Not in a state-covered tip pool. A federal no-credit pool may differ, depending on coverage.[3][5] |
| Dishwasher | Depends | Not in a state-covered tip pool. A federal no-credit pool may differ, depending on coverage.[3][5] |
| Leadership | ||
| Shift lead | Depends | Has to qualify through real tipped duties. Anyone who works as a manager under federal rules can't get pooled tips.[3][5] |
| Manager or supervisor | Not allowed | Can't receive pooled tips under federal rules.[5] |
| Owner | Not allowed | Can't receive pooled tips under federal rules.[5] |
- Managers and supervisors
- Under federal rules, managers and supervisors can't get pooled tips. Tips for service they alone provide are separate.[5]
- Owners
- Federally covered employers can't keep workers' tips. Owners with 20% equity who actively manage count as managers.[5]
- Back of house
- State-covered pools leave out kitchen-only staff who don't regularly get tips. Federal no-credit pools need a separate coverage check.[3][1]
- Who sets the percentages
- The employer can set a fixed formula with notice before the pay period. State-covered workers keep at least 85% of their tips.[3][4]
- Cap on what a pool can take
- In state-covered businesses, a pool can't cut anyone's tips by more than 15%. Workers keep at least 85%.[4][1]
- Pooling allowed
- Yes.[3]
Two rulebooks
State coverage changes the pool rules
Some businesses fall under North Carolina's own minimum-wage rules, others under federal law. The pool rules differ, so coverage matters.[4][3][1][5]
State-covered business
- Tipped employee: more than $20 a month in tips
- Pool can't cut anyone's tips by more than 15%
- Kitchen-only staff stay out of the pool
- Workers certify their tips
Federally covered business
- Tipped employee: more than $30 a month in tips
- No 15% cap from the state agency
- No-credit pools may include kitchen staff
- Managers and supervisors get no pooled tips
07Put it to work
Setting up a tip pool in North Carolina
Under North Carolina rules, 6 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $268.29 | $250.00 | $211.78 |
| Jordan | $268.29 | $250.00 | $211.76 |
| Priya | $268.29 | $250.00 | $211.76 |
| Sam | $175.61 | $200.00 | $211.76 |
| Luis | $109.76 | $125.00 | $176.47 |
| Ava | $109.76 | $125.00 | $176.47 |
| Theo | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Kim | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Rafa | Not in the pool. Out here: this pool includes servers paid with a tip credit. | ||
| Dana | Not in the pool. Can't receive pooled tips under federal rules. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. The guest-facing staff here are assumed to meet North Carolina's condition for sharing (see who can be in the tip pool, above). Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in North Carolina
North Carolina has no service charge rule of its own. Under federal law a mandatory service charge is not a tip, and any part paid to staff counts as wages.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | A required service charge isn't a tip, whatever it's called. Amounts promised to staff still have to be paid.[3][4] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[5] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[9][10] |
| Guest notice | None needed | No state rule. Federal law sets no menu or receipt notice rule.[3] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does North Carolina say?Federal ruleA required service charge isn't a tip, whatever it's called. Amounts promised to staff still have to be paid.[3][4]
- Step 3Check the cityNo city service charge rules on file for North Carolina.
- Menu and receipt notice
- No state rule. Federal law sets no menu or receipt notice rule.[3]
- Large-party auto gratuities
- A required automatic gratuity is a service charge, not a tip, whatever the label says.[3]
Local service charge rules
No local service charge rules on file for North Carolina.
More on the difference: service charge vs tip.
09Card tips
Card tips in North Carolina: fees and payout timing
In North Carolina only the tip's share of the card processing fee can come out of a card tip. Payout deadline: card tips count when charged and are due by that pay period's payday.
Only the card issuer's actual fee on the tip, not on the meal or extra overhead.[3]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlineNorth Carolina rule Card tips count when charged and are due by that pay period's payday.[3]
- Last dayFinal pay All earned wages by the next regular payday, for any separation. Mailed on written request.[4]
Paydays: A set regular payday. Pay periods can be daily, weekly, biweekly, twice a month or monthly.[4]
Paying tips on a payroll card
- Allowed?DependsThe state agency's page contemplates required cards. Federal rules separately bar forcing workers onto one.[6]
- Worker consent needed?Yes (federal)No state rule. Federal rule applies: yes. The employer cannot require its payroll card.[11][6]
- Free way to get the money?State ruleAll pay available on payday, with one free full withdrawal each payday. Later transactions may carry disclosed bank fees.[6]
- Must you offer another option?YesFederal rules require another way to get paid. North Carolina allows required direct deposit only if the worker picks the bank.[12]
- Holding cash tipsState ruleNo separate holding period. All tips are due on the regular payday, and valid pools can collect tips to redistribute.[4][3]
- Tips shown on the pay stubNo (federal)No state rule. Federal rule applies: no. FLSA does not require pay stubs; state laws and employer records are separate.[13][3]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in North Carolina
Keep each tipped worker's tips and hours on record, shift by shift. North Carolina: 3 years, unless another period applies.
North Carolina State
- Tip records Weekly tips, credit claimed, pool contributions and payouts. Workers certify their tips monthly or each pay period.[3]
- How long to keep them 3 years, unless another period applies.[14]
- Tip credit notice Required. Written notice of promised wages at hire and before changes. Pool notice before the pay period. Federal notice applies too.[4]
- Posters and forms North Carolina Workplace Laws Poster; Written hire/promised wage and payday notice.[4]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[5]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[15]
- Tip credit notice Oral or written notice must state cash wage; tip credit amount; credit cannot exceed actual tips; employee retains tips except valid traditional pool; credit unavailable until informed. Traditional pool contribution amounts also disclosed.[5]
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in North Carolina?
Workers in North Carolina can file a tip or wage claim with the North Carolina Department of Labor, Wage and Hour Bureau (800-625-2267). Filing is free, and this page can't settle a dispute; the state can.[1]
- Phone
- 800-625-2267[1]
- Website
- labor.nc.gov
Retaliation: No punishment for wage complaints or questions. The retaliation complaint process is separate from wage claims.[16]
Penalties: Unpaid wages and tips, interest and an equal amount in damages. A court can cut damages for good faith. Fees possible.[4]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedTips can't go to the employer. Other wage deductions need authorization and notice and can't break minimum wage.[3]
- BreakageNot allowedTips can't go to the employer. Other wage deductions need authorization and notice and can't break minimum wage.[3]
- Register shortagesNot allowedTips can't go to the employer. Other wage deductions need authorization and notice and can't break minimum wage.[3]
- UniformsNot allowedTips can't go to the employer. Other wage deductions need authorization and notice and can't break minimum wage.[3]
- Card processing feesAllowedOnly the actual card fee on the tip.[3]
- A manager's shareNot allowedFederally covered employers can't keep workers' tips.[5]
11Law changes
What changed in North Carolina tip law, and what's coming
No statewide increase with a published amount is on file for North Carolina as of .
No changes to North Carolina tip or wage rules on file for the last 24 months.
Bills and ballot measures
Nothing pending as of .
Key statutes
- GS 95-25.1–3, 6–8, 13–15, 22
- 13 NCAC 12.0303, .0802
- GS 95-241 (REDA)
12FAQ
North Carolina tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about North Carolina tip law, each linked to its source.
What is North Carolina's tipped minimum wage?
$2.13 an hour in cash. Cash plus tips has to reach $7.25, and the employer covers any gap.[1]
Can a city set a higher minimum wage?
No. State law preempts local minimum wages for private employers like restaurants.[4]
Does the 15% tip pool cap apply to every restaurant?
Who counts as a tipped employee?
Under state law, anyone who customarily gets more than $20 a month in tips. The federal test is more than $30.[4]
Can card fees come out of tips?
Only the card issuer's fee on the tip itself.[3]
When are credit card tips due?
By the payday for the pay period when the customer signed the charge.[3]
Is a mandatory service charge a tip?
No. A required service charge isn't a tip, whatever it's called.[3]
Is a payroll card withdrawal free?
One full withdrawal each payday has to be free, and all pay has to be available on payday.[6]
13Compare
How North Carolina compares with nearby states
North Carolina borders Georgia, South Carolina, Tennessee and Virginia. Virginia pays a higher minimum wage than North Carolina's $7.25. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
States with the same rules
Same tip credit class as North Carolina: Tip credit, federal cash wage.
- Indiana tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Kansas tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Nebraska tip laws$15.00 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Oklahoma tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Utah tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Kentucky tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own North Carolina setup.
14Sources
Sources for North Carolina tip laws
Every figure on this page links to one of these 16 sources: 9 for North Carolina and 7 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1Minimum Wage in North CarolinaNorth Carolina Department of Labor · Official source · Checked Pinpoint: Tipped cash wage; Tip credit requirementswww.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/minimum-wage-nc
What the source says
“The minimum wage in North Carolina is currently $7.25 an hour.”
“MUST pay at least $2.13 an hour to tipped employees”
“tipped employees be notified in advance and be permitted to retain all tips”
- 2State Tipped Minimum Wage TableU.S. Department of Labor · Official source · Page updated · Checked Pinpoint: North Carolina rowwww.dol.gov/agencies/whd/state/minimum-wage/tipped
What the source says
“North Carolina 13 $7.25 $5.12 $2.13”
- 313 NCAC 12.0303 Tips and Tip CreditsNorth Carolina Office of Administrative Hearings · Official source · Page updated · Checked Pinpoint: .0303(c); .0303(h)(3)reports.oah.state.nc.us/ncac/title%2013%20-%20labor/chapter%2012%20-%20wage%20and%20hour/13%20ncac%2012%20.0303.pdf
What the source says
“Tips belong to the employee for whom they were left by the customer.”
“the employee may be required to surrender tips received for distribution in accord with the tip pooling arrangement.”
“only employees who customarily and regularly receive tips receive a share from the pool.”
- 4Wage and Hour Act Article 2ANorth Carolina General Assembly · Official source · Page updated 2026 · Checked Pinpoint: 95-25.2(14); 95-25.3(b); 95-25.1(d)www.ncleg.gov/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_95/Article_2A.html
What the source says
“"Tipped employee" means any employee who customarily receives more than twenty dollars ($20.00) a month in tips.”
“shall be ninety percent (90%) of the rate in effect under subsection (a) above, rounded to the lowest nickel.”
“The provisions of this Article supersede and preempt any ordinance, regulation, resolution, or policy”
- 5Fact Sheet 15 Federal Tipped EmployeesU.S. Department of Labor · Official source · Checked Pinpoint: Overtime Problems; Other Tip Pooling; Tip Credit, paragraph 2www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“The employer may not take a larger FLSA 3(m)(2)(A) tip credit for an overtime hour than for a straight time hour.”
“An employer that takes a tip credit can require tipped employees to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips”
“For example, an employer that implements a nontraditional tip pool may require tipped employees, such as servers, to share tips with non-tipped employees, such as dishwashers and cooks, but only if all workers receive a direct cash wage of at least the federal minimum wage.”
- 6Debit Payroll Card Payment and Direct DepositNorth Carolina Department of Labor · Official source · Checked Pinpoint: Mandatory card question; Conditionswww.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/debit-payroll-card-payment-and-direct-deposit
What the source says
“One-time use of the card by the employee on payday is at no cost to the employee.”
“If the card is mandatory (required by the employer) an employee must receive his pay without reduction.”
“The employee can withdraw all monies due on payday.”
- 7Tip Regulations under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Checked Pinpoint: Regulatory History 2020-2024, item 3; Regulatory History, item 4; Tip regulation topics listwww.dol.gov/agencies/whd/flsa/tips
What the source says
“a federal court vacated the revision, with the effect of reinstating the Department’s original dual jobs regulation.”
“On December 16, 2024, the Department announced a technical rule to restore the original dual jobs regulation at 29 CFR 531.56(e) .”
“29 CFR 531.56(e) ); and Calculating overtime pay for tipped employees ( 29 CFR 531.60 ).”
- 8Field Assistance Bulletin No. 2026-1U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: p. 1, introductory paragraphs; p. 1, introductionwww.dol.gov/sites/dolgov/files/WHD/fab/fab2026-1.pdf
What the source says
“These withdrawn opinion letters and the FOH provision that implemented them should no longer be relied upon as WHD enforcement guidance.”
“withdrawn on January 14, 2025 (see WHD FOH Revision 785), no longer reflects the Division’s policy or interpretation of the Act.”
“This Field Assistance Bulletin (FAB) withdraws Wage and Hour Division (WHD or Division) Opinion Letters FLSA-895 (Aug. 8, 1979); WH-502 (Mar. 28, 1980); and FLSA-854, 1985 WL 1259240 (Dec. 20, 1985).”
- 9Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 10Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 11What is a payroll card?Consumer Financial Protection Bureau · Official source · Page updated · Checked Pinpoint: definition, paragraph 1; paragraph following definitionwww.consumerfinance.gov/ask-cfpb/what-is-a-payroll-card-en-401
What the source says
“A payroll card is a prepaid card arranged by an employer for the purpose of paying its employees’ wages or salary.”
“Your employer can’t require you to receive your wages on a payroll card.”
“Your employer has to offer you at least one alternative to a payroll card.”
- 12If my employer offers me a payroll card, do I have to accept it?Consumer Financial Protection Bureau · Official source · Checked www.consumerfinance.gov/ask-cfpb/if-my-employer-offers-me-a-payroll-card-do-i-have-to-accept-it-en-407
What the source says
“Your employer has to offer you at least one alternative and allow you to choose.”
- 13Questions and Answers About the FLSA, DOL WHDU.S. Department of Labor · Official source · Checked Pinpoint: Recordkeeping and Notices, Are pay stubs required?www.dol.gov/agencies/whd/flsa/faq
What the source says
“However, the FLSA does not require an employer to provide employees pay stubs.”
- 1413 NCAC 12 Wage and Hour current rulesNorth Carolina Office of Administrative Hearings · Official source · Checked Pinpoint: .0802, physical p. 15reports.oah.state.nc.us/ncac/title%2013%20-%20labor/chapter%2012%20-%20wage%20and%20hour/chapter%2012%20rules.pdf
What the source says
“must be retained by employers for three years, unless a different period of time is specifically stated elsewhere in this Chapter.”
- 15Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
“Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243).”
“Records on which wage computations are based should be retained for two years,”
- 16Retaliatory Employment DiscriminationNorth Carolina Department of Labor · Official source · Checked Pinpoint: REDA protected activitieswww.labor.nc.gov/workplace-rights/retaliatory-employment-discrimination
What the source says
“These include filing or threatening to file a wage and hour, workplace health and safety, or worker’s compensation complaint or claim.”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.