Compromise reached in tip-sharing plan
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-ofhouse 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 nontipped 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.
Angelo I. Amador, a senior official at the National Restaurant Association, an industry trade group, said in a statement that he was pleased that the new legislation would make it possible for cooks, dishwashers and other workers to share tips. But he expressed concern that “the enforcement and penalty language for unintentional violations goes too far.”
The provision would give the secretary of labor broader authority to impose civil penalties on employers who steal tips.
In addition to restaurant workers, the rules would apply to tipped employees in other fields, like hairstylists and manicurists.
It is possible that some highearning tipped workers would do worse under the compromise. Restaurants would be permitted to set up pools that redistribute their tips to colleagues who often don’t earn tips now.
But according to Saru Jayaraman, president of the Restaurant Opportunities Centers United, a worker advocacy group, the vast majority of workers would benefit from the compromise provision, because such tip-pooling is linked to workers receiving the regular minimum wage, as opposed to the tipped minimum wage, which can be several dollars per hour lower.