CHN: Tipped Workers Could Lose Millions under Proposed Labor Department Rule Change

Advocates for restaurant employees and other tipped workers are speaking out against a proposed rule that would make tips the property of employers, a proposal which opponents fear would lead to significantly less income for workers. The regulation from the Trump administration’s Department of Labor, pushed by the National Restaurant Association, would allow for the confiscation of tips as long as the tipped employees are paid full minimum wage. An Obama administration rule had banned these tip pooling arrangements, but this new proposal would reverse that rule.

An analysis from the Economic Policy Institute estimates that if the Department of Labor proposal is implemented, employers will pocket $5.8 billion of employees’ tips every year. It also came to light on Feb. 1 that an economic analysis compiled by DOL staff also showed that the proposal could potentially result in the loss of billions of dollars for tipped workers, but that this analysis was shelved and that instead the Department of Labor claimed that it “currently lacks data to quantify possible reallocations of tips.” The DOL’s Office of Inspector General is looking into the matter.

CHN called on the Labor Department to withdraw the proposed rule and protect tipped workers, and provided comments opposing the proposal. According to the National Employment Law Project, who has been leading advocates’ efforts on this issue, 350,000 comments were submitted to DOL on its proposal. For more information, see this blog and this blog from CHN.

Labor and Employment
Tipped workers