If an owner of a restaurant is collecting the tips andincluding himself, is this legal?

UPDATED: Aug 2, 2011

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If an owner of a restaurant is collecting the tips andincluding himself, is this legal?

He divides the money equally between all employees that worked that week, taking their hours and giving them their percentage of the tips. He also includes himself that percentage. He works every day/night so I am assuming he is collecting way more than any of us. Although highly unethical, is this legal in the state of NC?

Asked on August 2, 2011 North Carolina


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I don't believe the employer is allowed to share in the tip pool in these situations in North Carolina. North Carolina does have a law allowing the employer to take a tip credit against the minimum wage paid but the employees must be able to keep all of their earned tips, report the amount to the employer and be warned in advance of this policy by the employer and agree to it. You should file a report with your state department of labor and understand, you cannot be fired in retaliation.

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