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Feds propose new rule that would allow restaurants to keep tips earned by servers, to cover minimum wages



This news story was published on February 12, 2018.
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WASHINGTON, D.C. – The Department of Labor is proposing a new rule that would allow restaurants to keep tips earned by servers, to cover minimum wages.

The new regulation, provides in part that an employer may take a partial credit (tip credit) against its minimum wage payment obligation to a tipped employee based on tips received and retained by the employee. The Department’s regulations at this time limit an employer’s ability to use an employee’s tips regardless of whether the employer takes a tip credit or instead pays the full FLSA minimum wage directly to the employee. In this Notice of Proposed Rulemaking, the Department will propose to rescind the current restrictions on tip pooling by employers that pay tipped employees the full minimum wage directly.

Democrats are accusing the White House and President Donald Trump for the regulation, saying the new rule would take “billions” of dollars out of low wage earner’s pockets.

Liberal California Senator Dianne Feinstein tweeted, “40% of servers live in poverty and 80% of servers are women. The Trump administration’s attempt to steal their tips is an attack on women workers, plain and simple.”

In a letter to Secretary of Labor Alex Acosta released February 6, two dozen Senate Democrats labeled the new regulation, “a stark example of how far the Trump Administration is willing to go to appease business interests at the expense of working families.”

Here’s the full letter:

We write to express our deep concern regarding reports that the Department of Labor (DOL) concealed evidence from the public showing that DOL’s proposed tip rule would result in employees losing billions of dollars in tips. DOL is forcing through a regulation that would take money out of the pockets of low-wage workers and, even worse, it covered up the potentially catastrophic impacts from workers and advocates. This is a stark example of how far the Trump Administration is willing to go to appease business interests at the expense of working families.

In December, DOL proposed a rule that would rescind portions of its tip regulations that protect tipped workers. These low-wage workers—two-thirds of whom are women—struggle to support themselves and their families, experiencing poverty rates twice as high as rates for all working people.’ Workers rely on their tips as a major source of income, they work extremely hard to earn them, and they deserve to keep them. The existing tip regulations make clear that tips are the property of employees, ensuring that employers are not able to confiscate employees’ tips and use them as they please. These regulations are essential to ensuring that workers across the country who receive tips at their jobs earn a fair wage by being able to keep their tips.

DOL provided the public with no quantitative economic analysis in its proposed rule, contrary to multiple Executive Orders on rulemaking procedures, stating that DOL “currently lacks data to quantify possible reallocation of tips[.]”2 However, according to news reports, DOL did conduct this quantitative analysis and found the rule would result in workers losing billions of dollars if it is finalized. Instead of allowing the public to provide feedback on this impact on workers, DOL reportedly chose to bury the analysis and instead issue the proposed rule that stated that uncertainties were too great to perform an analysis. After the proposed rule was released, Senator Murray, as Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, specifically asked DOL if any such data existed or analysis had been conducted. DOL has yet to respond.

Many of us already are on record expressing our deep concerns that DOL, which has as its mission “[t]o foster, promote, and develop the welfare of wage earners … of the United States,” would propose a rule that it was aware would cost workers billions of dollars each year.3 However, the idea that officials at DOI.,—potentially including yourself—would take steps to mislead the public and deprive them of information about the impacts of the rule leads us to the unavoidable conclusion that you must act to withdraw this rule.

Allegedly, the Labor Department concealed an economic analysis in connection to this regulation change, prompting an audit: New Audit Announcement: Tip Regulations Under the Fair Labor Standards Act

 

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15 Responses to Feds propose new rule that would allow restaurants to keep tips earned by servers, to cover minimum wages

  1. Anonymous Reply Report comment

    February 13, 2018 at 9:25 am

    Rumor is food workers at the casino in Northwood only get 5.00 per hour so what are you talking about minimum wages they pay ?? Sounds like some demogogery bs.

  2. Anonymous Reply Report comment

    February 13, 2018 at 8:58 am

    Obama passed this during his term to screw over Trump – just coming into effect now like the dreamers bullshit he passed all by HIMSELF – what a low life non American.

  3. Anonymous Reply Report comment

    February 12, 2018 at 2:44 pm

    Amazing. The republicans will stop at nothing to cater to the rich. They are determined to have two classes of people; rich and poor.

  4. Anonymous Reply Report comment

    February 12, 2018 at 12:25 pm

    Going through a check out line and notice a little old lady all of 4’2″ and 70 pounds shaking her little coin purse vigorously all the while clutching a few meager dollars to pay for food. Who let this person down. There 1000’s in Iowa. Old and proud from a bygone day. So just drop the local from the bank the gig is up. Same goes for the medicine to stay alive. There is no spreading the wealth around in a community to keep it thriving. A local restaurant means you pay for my food. It’s the server’s job to report the tips based on their service.

  5. Mike Rotch Reply Report comment

    February 12, 2018 at 11:51 am

    If tips were truly based on performance, then this would be a big deal. But society now has made tips a commonplace, no matter how messed up your order is, or crappy your service. Plus the don’t honestly report tips, so these numbers are a complete falsity.

  6. Anonymous Reply Report comment

    February 12, 2018 at 11:37 am

    Chain of Command: Eruo trash Globalist > Greedy 1% > Wall Street > their banks > direct deposit only > electronic payments > check out line swipes > bank cards > overspending > tomato soup/crackers. lol

  7. My 2 Cents Reply Report comment

    February 12, 2018 at 11:08 am

    What don’t they just change the restaurant law, so the employer has to pay at least minimum wage, or more, so people don’t have to pay tips?

    In Australia people don’t leave tips, because their workers in the restaurant business make decent salaries.

    • Mike Rotch Reply Report comment

      February 12, 2018 at 12:58 pm

      Exactly. If tips were solely given on performance, we would have homeless in every town in America. Tips, like unions, had their place in the workforce. But times, they are a changing, and neither are relevant any longer in this century.

  8. Anonymous Reply Report comment

    February 12, 2018 at 10:44 am

    This is why cash is king. Sure people tend to tip more using bank cards and cell phones as payments. Now the nickel and dime Wall Street agency is going to squeeze you a little bit more. Which was the plan all along. They’ ll figure out ways to sniff the loose change out of your car seats too. When a downtown thrives restaurants are not far behind. Teaching kids about the working world while putting cash in their pockets. Now that cash is being filter through the banks to the cash cows out east. These guys get a big fat 0 on economics.

  9. bodacious Reply Report comment

    February 12, 2018 at 10:37 am

    This sure sounds like the Trumpster is looking out for the average worker, doesn’t it?

    • anonymous Reply Report comment

      February 12, 2018 at 11:25 am

      There is no evidence Trump has anything to do with this proposal other than partisan Dems accusing him. When are Dems going to do the people business vs. attacking Trump just because she beat the crap out of Hitlary in the election? This rule will not make it through congress so don’t get your undies in too big a bunch.

      • bodacious Reply Report comment

        February 12, 2018 at 12:15 pm

        The department of labor is doing what the administration tells them to do. Trump the prez he calls the shots.

        • Anonymous Reply Report comment

          February 13, 2018 at 3:18 pm

          Rule put in by Obama just taking effect now. Communist bastard.

          • bodacious

            February 13, 2018 at 4:02 pm

            Ha ha ha. You are really funny

      • Anonymous Reply Report comment

        February 12, 2018 at 7:20 pm

        Popular Vote?