Trump Administration to Restaurant Owners: We’re Going to Help You Keep Workers’ Tips

By Sahid Fawaz

Restaurant servers could see their already meager pay dwindle.

Vox.com reports:

“The Trump administration has kept its promise to let companies do business with less government oversight. From the Environmental Protection Agency to the Department of Health and Human Services, the administration has rolled back rules on oil companies, banks, and health insurance companies.

Trump’s efforts could soon reach your neighborhood restaurant, barbershop, and nail salon. One of the administration’s major deregulation efforts is currently underway at the Department of Labor — and if implemented, it could potentially hurt millions of American workers who get tips as part of their jobs.

The agency is considering a new rule that would give employers unprecedented control over what to do with a worker’s gratuities. The rule, which the agency proposed in December, would repeal an Obama-era regulation that made official what had been the common view for decades: that tips are the sole property of the workers who earn them. It would essentially allow employers to use their workers’ tips for tip-pooling arrangements, provided their workers make the minimum wage.

If the new rule is finalized, it would be a boon to the restaurant industry, which has been fighting for years to control how servers’ tips are distributed.

“This is a major departure from how the DOL has always interpreted the law,” said Judith Conti, the federal advocacy coordinator for the National Employment Law Project. “It sets policy for all tipped workers: parking attendants, car washers, airport valets, taxi drivers, hotel bellhops.”

The rule would have an immediate effect in at least six states, including Arizona and Nevada, where employers are required to pay the full minimum wage to all tipped workers. (Under federal law, the minimum wage for tipped workers is only $2.13; the full minimum wage is $7.25.)

But even states that don’t require the full minimum wage for tipped workers will be affected. Workers who earn the full minimum wage but still count on tips to supplement their pay — such as barbers and nail technicians — could see their take-home pay affected. (According to one estimate, there are 4.3 million tipped workers in the US.)

The rule would also create an incentive for some restaurant owners in those states to pay servers the full $7.25 hourly minimum wage. That might sound like good news for servers who make only the tipped-worker minimum wage of $2.13 per hour — but if those workers normally make enough tips to push their pay above $7.25, the new rule would allow their employers to take any tips they earn above minimum wage, effectively lowering their take-home pay. Including tips, the average hourly wage for restaurant servers in the United States was $11.73 in 2016.

The new rule would allow restaurant owners to do two things in particular. First, it would let employers collect the servers’ tips into a pool that would be shared with back-of-the-house workers — dishwashers, cooks, etc. — who have to be paid the regular minimum wage and aren’t typically tipped. Restaurant owners say that back-of-the-house workers should get a share of the tips because they contribute to a customer’s overall experience, but labor rights groups and servers argue that restaurant owners should just pay those workers better, instead of using servers’ tips to subsidize their pay.

But the second way employers could use the tips goes even further than expanding this type of tip pooling. The rule lists examples of how else employers could use a worker’s gratuities: to renovate their restaurants, lower menu prices, or hire more workers. In other words, it allows restaurant owners to keep the tips for themselves.”

For the rest of the story, visit Vox.com.

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