The Trump Administration Is Planning to Rob America's Waitresses Blind
Two of the Trump administration's favorite pastimes are imperiling women and screwing over workers. In less than a year, it has dialed back Title IX's application in campus sexual assault cases, attempted to defund Planned Parenthood, championed right-to-work legislation that would severely hamper labor unions and ditched an Obama-era regulation that ensures employees are compensated fairly for their overtime hours. A rule under consideration by the Department of Labor would harm both groups at once.
According to the Economic Policy Institute, a new proposal that management be allowed to keep employees' tips would cost women workers $4.6 billion annually, or approximately 80 percent of the $5.8 billion it would cost the industry overall. That $5.8 billion represents 16.1 percent of the estimated $36.4 billion tipped workers earn each year.
"DOL has masked the fact that this rule would be a windfall to restaurant owners and other employers—out of the pockets of tipped workers—by making it sound as if this rule is about tip pooling," the authors of the report observe. "Of course, once employers have full control of tips, one of the things they could do with those tips is distribute them to 'back of the house' workers like dishwashers and cooks. But the proposed rule does not require employers to distribute the tips, so employers would be no more likely to share tips with back-of-the-house workers than they would be to make any other choice about what to do with a business windfall, including using the money to make capital improvements to their establishments, to increase executive pay, or to line their own pockets."
The think tank notes that many businesses are already pinching their staffers' tip money, a seizure that constitutes wage theft. As many as 12 percent of workers in Chicago, Los Angeles and New York report employers or supervisors are stealing their tips, so codifying this practice into law is unlikely to lead to money trickling down to waitstaff, bussers and dishwashers. Tipped employees stand to lose an average of $1000 a year.
"There is currently no limit to what these workers can be paid, so employers are already paying their back-of-the-house workers what they need to pay to attract workers willing to work in those jobs," the report's authors continue. "If employers do share some tips with them, it will likely be offset by a reduction in their base pay, leaving their take-home pay largely unaffected."
EPI estimates the Trump rule will cost white, non-Hispanic women $3.5 billion annually, Hispanic workers of any race $1.4 billion and non-Hispanic, black workers $480.2 million. Asian workers and those of other races and ethnicities would lose $382.5 and $102.4 million respectively.
Read the full report at the Economic Policy Institute.