Tip-sharing plan dropped in budget

The Trump administration has backed away from a proposed regulation that would have allowed restaurant owners and managers to pocket the tips of their workers.

The change was negotiated by Sen. Patty Murray, D-Wash., and Labor Secretary R. Alexander Acosta after the proposal encountered months of opposition. Labor advocacy groups argued that the regulation would transfer billions of dollars from workers to employers.

The restaurant industry had backed the proposal, saying it would allow the tips given to waiters and waitresses to be shared with so-called back-of-house workers, like cooks and dishwashers.

Under the compromise, inserted into the congressional spending bill that won final approval early Friday, federal law would be revised to make clear that employers cannot under any circumstances keep any portion of the tips earned by their workers.

Tips could be redistributed to non-tipped workers only if employers pay all their employees the regular minimum wage in their jurisdiction, as opposed to the lower minimum wage that most states allow for tipped workers.

The tip pool would also have to exclude supervisors, managers and owners. Under the Labor Department’s proposed regulation, a tip pool could have included those groups.

“This protects workers from employers and managers skimming their tips and sets up conditions for better wage justice in restaurants and bars across the country,” said Judy Conti, government affairs director at the National Employment Law Project, a worker advocacy group.