A New Regulation May Allow Employers To Snatch Billions In Tips From Service Industry Workers

Senior Contributor
01.18.18 47 Comments

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Tipping, as a practice, is probably one of the worst parts of being a food service worker. People subject you to their political opinions or just outright abuse you — simply because they can get away with it. Trust us, no one wants your Mr. Pink monologue.

Listen, Jack, I don’t need the whole spiel, just kick me five bucks because you’re eating in a country where this is how servers are traditionally compensated, cool?

Now a Department of Labor rule intended to allow employers to create “tip pools” so that tips are shared across the front and back of the house, as long as all the workers are paid minimum wage, may make the problem much worse. Because the current regulation, as structured, means that employers can also just pocket the tips if they feel like it.

To understand this rule, you need to understand the laws around tips in the U.S. Waitstaff are paid less in the U.S. because they’re supposed to make up the difference (and more, supposedly) in tips. Every state has a different standard, but that’s how it works, generally. If waitstaff doesn’t make the minimum wage in tips, the restaurant makes up the difference.

What the Department of Labor wants to do is remove certain portions of the law to allow employers to require tip pools if they just pay that minimum wage up front, regardless of tips. Under the law, you’re not tipping your waiter: You’re tipping the business.

The push against this policy isn’t to condemn tip pooling out of hand. It’s fair to ask why the dishwashers and cooks don’t get tips too, of course. But, as critics have pointed out, there’s a giant problem with the regulation: The law, as is, places absolutely no requirement whatsoever that employers spend the tip pools on employees. They can just pocket the tips, legally, and there is nothing employees can do. Restaurant workers would potentially be out billions.

You might think that, surely, no restaurant would do this, but you’d be surprised. A study of workers in three major cities found that 12% of tipped employees had tips stolen from them, by their employers, at least once in a given year. Besides that, there’s the question of the social contract. Nobody gives a waiter a few bucks and tells them to ensure the CEO of the holding corporation that owns the subsidiary with a dozen different franchises gets it. And of course, there’s the fact that this law will benefit the President personally; after all, his holding company manages several restaurants and other businesses that work on tipped labor. If nothing else, it’s worth asking why suddenly the tip belongs to the CEO, not the worker.

(via Salon)

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