Federal & State Regulations | Tips - North Dakota | J. J. Keller® Compliance Network

State Info

Summary of difference between federal and state regulations

There are certain instances where employers can pay employees at a rate lower than the minimum hourly wage specified by the Fair Labor Standards Act. The most common instance pertains to an employee who earns tips. The employer can deduct the amount of the tips (but only up to a certain maximum amount) from the hourly wage.

North Dakota §46-02-07-03 allows up to a 33 percent tip credit. An employer who elects to use tip credit has to tell the employee in advance and must maintain written records that prove the employee received at least the minimum wage when direct wages and the tip credit allowance are combined.

Tip pooling is allowed but only among tipped employees. A tip pooling vote must be taken, and fifty percent plus one of all tipped employees are required to approve it. The employer must maintain a written record of each vote on tip pooling.