Workers Claim Victory Against 'Tip-Stealing' Rule

After a number of decidedly anti-labor appointments to top positions in the Trump administration’s Department of Labor, it was clear that big business would be a major player in the department’s activities. Indeed, last December, with support from the National Restaurant Association, the department proposed a “tip pooling” rule that would allow employers to control workers’ tips, including taking them for themselves.

But tipped workers yesterday gained a victory against what critics have more aptly termed the “tip stealing” rule: a provision forbidding employers, including managers and supervisors, from stealing tips was included in the omnibus budget bill, with bipartisan support, including from Labor Secretary Alexander Acosta. The provision would amend the Fair Labor Standards Act to prohibit employers from pocketing employees’ tips. Tipped workers often earn less than minimum wage, relying on their tips to supplement their pay.

“This landmark victory belongs to all the restaurant servers, bartenders, car wash workers, valets, attendants, and all the other tipped workers in America who fought back when the Trump administration proposed its misguided tip-stealing rule,” Christine Owens, executive director of the National Employment Law Project, said in a statement.

Under the DOL’s proposed rule, employers would be allowed to “pool” employees’ tips, ostensibly to share tipped workers’ wages with other staff—for example, a restaurant’s wait staff could be required to share their tips with back-of-the-house employees such as cooks. But there was no language prohibiting employers from keeping the tips.

The Economic Policy Institute estimated that under the proposed rule, workers would lose approximately $5.8 billion in tips to their employers. What’s more, the Labor Department appears to have reached similar conclusions: The department’s political appointees attempted to bury the DOL's own research, which showed that workers would lose out under the rule.

But as tipped workers learned about the proposal, there was a huge backlash—and furious organizing against it. Indeed, many tipped workers and their allies, mobilized by the workers’ advocacy group Restaurant Opportunities Centers United, submitted over 200,000 public comments on the rule and launched protests nationwide. Memorably, activists dropped a banner reading “Trump: Don’t Steal Our Tips!” from the roof of the DOL building.

According to the National Women’s Law Center, two-thirds of tipped employees are women. The federal tipped minimum wage has remained at $2.13 since the 1990s, and in the 18 states where the minimum tipped wage is $2.13, nearly one in five tipped workers live in poverty—more than twice the poverty rate of non-tipped workers. Discrimination plays a role too, as black workers, on average, receive fewer tips than white workers, and sexism in tipping is also rampant, with many women workers subject to sexual harassment. The DOL’s proposed rule would only compound these inequities.

At a House Appropriations Committee hearing in early March, House Democrats Katherine Clark of Massachusetts and Rosa DeLauro of Connecticut questioned Acosta about the proposed rule. Acosta claimed that “no one wants” employers to steal tips, but that the department did not have the authority to outlaw tip stealing. As Clark continued to press the issue, the secretary said that he would “absolutely” support legislation that would prevent employers from accessing employee tips.

Clark and DeLauro introduced the Tip Income Protection Act the next day.

Their proposed worker protections were added to the omnibus budget bill. The House has passed the bill and the Senate must pass the budget plan by Friday at midnight to avoid another government shutdown.

Earlier in the hearing, Clark asked Acosta a simple question: “Have you ever worked for a tipped wage?” Acosta replied that no, he had never worked for a tipped wage. “Well, I have,” said Clark.  The workers who mobilized against the proposed rule—and won language in the omnibus bill—also know what it’s like to work for a tipped wage.

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