Restaurant Stealing Tips To Pay Wages Of Non-tipped Employees

Location: North Carolina

Hi all,

I’ve worked FOH in restaurants (primarily as a waitress) for nearly 10 years in NC & have never seen a “tip-out” system like the one outlined in an email I received a couple of days ago from my current employer.

The email reads as follows:

“The new pay structure is: Every server tips out a flat 15% of their tips, every shift, and that money goes only to the bar and the hosts.

HOW IT WORKS
• Servers: 15% of your tips, card and cash, every shift. You keep 85%. No more percentages of sales, no assumed tip rates, nothing that changes by the day.

• Bar: keeps 100% of the tips rung on the bar and online logins, as always. Your 15% is added on top.

• Weekdays (no host): all of the servers' 15% goes to the bar. Weekday servers are supporting the barista working beside them, not a weekend host.

• Host days (usually Saturday and Sunday): the servers' 15% that day is shared between the host and the bar, with hosts getting $3 an hour more to even out their lower base wage (below).

HOSTS
• Wage: $2.15 an hour, the same base as servers.

• Tips: hosts share the host-day tip pool with the bar, plus $3 an hour more in tips than the bar. Bar staff start at a $5 base wage and hosts are at $2.15, so the extra $3 keeps host and bar pay about even. If the bar is making $13 an hour in tips that day, the host makes $16.

• Guarantee: hosts are guaranteed $18 an hour, wage plus tips. If tips ever come up short, the restaurant
makes up the difference, never the weekday servers.”

TLDR: Hosts wage is now $2.15/hr, servers contribute 15% of their tips made in card/cash every day to a “tip pool” that is then divided between the bar and hosts— server tips guarantee hosts are making $18/hour. If tips aren’t enough that day to cover this $18/hr, the restaurant pays the difference.

…is this legal??? Like at all? It’s my understanding that because hosts do not fall into the category of being “tipped employees”, it’s required that they make NC minimum wage. Beyond that— is it legal to use other employee’s tips to guarantee a higher wage?

Thanks in advance(: