NC S535

Amends North Carolina labor law to phase out the use of tips as credited wages for tipped service workers over a three-year period beginning January 1, 2018.

From January 1, 2018 through December 31, 2018, allows tips to be counted as wages up to $4.12 per hour (reduced from the federal Fair Labor Standards Act amount).

From January 1, 2019 through December 31, 2019, further reduces the amount of tips that may be counted as wages to $2.12 per hour.

Beginning January 1, 2020, prohibits tips from being counted as wages entirely, requiring employers to pay the full minimum wage separate from tips.

Maintains existing tip pooling provisions allowing shared tips among service workers, with a cap of 15% maximum reduction per worker under pooling arrangements.