By Sahid Fawaz
Evidence shows that tipped workers face billions in lost income from a pooled tips proposal. But the current administration has moved to hide the report from the public.
“Labor Department leadership scrubbed an unfavorable internal analysis from a new tip pooling proposal, shielding the public from estimates that showed employees could lose out on billions of dollars in gratuities, four current and former DOL sources tell Bloomberg Law.
The agency shelved the economic analysis, compiled by DOL staff, from a December proposal to scrap an Obama administration rule. The proposal would permit tip pooling arrangements that involve restaurant servers and other workers who make tips and back-of-the-house workers who don’t. It sparked outrage from worker advocates who said the move would permit management to essentially skim gratuities by participating in the pools themselves.
Senior department political officials – faced with a government analysis showing that workers could lose billions of dollars in tips as a result of the proposal—ordered staff to revise the data methodology to lessen the expected impact, several of the sources said. Although later calculations showed progressively reduced tip losses, Labor Secretary Alexander Acosta and his team are said to have still been uncomfortable with including the data in the proposal. The officials disagreed with assumptions in the analysis that employers would retain their employees’ gratuities, rather than redistribute the money to other hourly workers. They wound up receiving approval from the White House to publish a proposal Dec. 5 that removed the economic transfer data altogether, the sources said.
The move to drop the analysis means workers, businesses, advocacy groups, and others who want to weigh in on the tip pool proposal will have to do so without seeing the government’s estimate first. The public notice-and-comment period for the proposal is set to end Feb. 5.
The new revelation lends credence to concerns from Democrats and labor organizers that the proposed rule will short change workers. It also raises questions about how much the DOL intends to take public feedback into account in shaping a final version of the rule.
The current and former DOL sources, hailing from both political parties, were all independently briefed by people involved in the rulemaking. They spoke on the condition of anonymity to prevent retaliation against themselves and others.”
For the rest of the article, check it out at Bloomberg BNA here.