Trump officials want to let restaurant owners pocket their employees' tips. More than a dozen states are fighting back.
The Trump administration has been on a crusade to rip up consumer protections in nearly every industry and profession.
The latest gambit is a new Labor Department proposal to cancel President Barack Obamas 2011 rule forbidding managers from “pooling” the earnings of tipped workers, a practice that has allowed restaurant owners to pocket the tips themselves, or cover the cost of wages for untipped workers to keep pay low for both.
The proposal has drawn widespread protest from foodservice workers. But it also faces criticism from the top legal officials in over a dozen states.
Attorneys general representing California, Connecticut, Delaware, Illinois, Iowa, Pennsylvania, Maine, Maryland, Massachusetts, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia have all signed a letter to Labor Secretary Alexander Acosta condemning the rule change.
“The Departments proposed rulemaking contradicts centuries-old employee and consumer expectations about tipping and threatens to seriously injure workers and deceive consumers,” the letter states.
“Rescission of the 2011 will lead to decreased overall compensation for at least some currently tipped employees earning at least the federal minimum wage and could result in such employees being deprived of tip income altogether,” the letter continues, noting that the “importance of gratuities to a tipped employees income cannot be overstated.”
The AG’s point to a recent report that “found that tips account for 58.5 percent of wait staffs earnings, and 54 percent of bartenders earnings” and that “restaurant workers, who comprise 62 percent of all tipped workers in the U.S., experience poverty at 2.6 times the rate of the U.S. workforce.”
According to the Economic Policy Institute, the Trump administrations tip-pooling proposal would result in employers stealing $5.8 billion in wages from low-income workers and 80 percent of those wages would be stolen from women.
The Labor Department seems to have gotten similarly poor numbers, because officials there suppressed an internal report on the rule from the public, a decision which is now under investigation by the Office of the Inspector General.
Trumps cronies keep moving to rip up popular and essential safeguards for the American people. But state governments aren’t about to let them get away with it.