The provision, which HuffPost’s Dave Jamieson reported on earlier Thursday, is designed to head off problems that likely would have arisen thanks to a rule proposed by the Department of Labor in December. The change, widely condemned by labor groups, would once again let restaurants force their front-of-the-house staff to pool the tips they earn and share them with kitchen workers as long as they were paid the federal minimum wage of $7.25 an hour. (The Obama administration banned that practice by regulatory fiat in 2011.) Critics of the move argued that it would essentially legalize tip theft because, as written, the rule did not require mangers or owners to actually redistribute gratuities among their workers once they were pooled. Instead, they could just pocket the money. The left-wing Economic Policy Institute estimated that the loophole would have cost workers $5.8 billion in lost tips annually.
Slate
March 23, 2018
Had the change passed, restaurant owners could have pocketed between $523 million and $14.2 billion in additional tips, a study from the progressive Economic Policy Institute think tank found. Nearly 80% of the tips that would be taken from employees would come out of the pockets of female tipped workers, according to the EPI. An economic analysis showing these negative implications was allegedly scrubbed by the Department of Labor, a report from the Economic Policy Institute found. (The Department of Labor did not respond to request for comment.) Now that this change has been stopped, the next fight for these organizations is raising wages for tipped workers, said Jayaraman.
Market Watch
March 23, 2018
Last year, the Trump administration unveiled a proposal to undo Obama-era safeguards, which required employers who pooled tips and gratuities to distribute them back to waitstaff. Under the new plan, employers could “use workers’ tips for essentially any purpose, as long as the workers were directly paid at least the federal minimum wage of $7.25 an hour.” Among the possible outcomes: employers could legally put some of the pooled tips in their own pocket. The Economic Policy Institute estimated that workers would stand to lose roughly $5.8 billion a year.
MSNBC
March 23, 2018
The Economic Policy Institute estimated that under the proposed rule, workers would lose approximately $5.8 billion in tips to their employers. What’s more, the Labor Department appears to have reached similar conclusions: The department’s political appointees attempted to bury the DOL’s own research, which showed that workers would lose out under the rule.
The American Prospect
March 23, 2018
OMB Director Mick Mulvaney overruled objections from the White House’s Office of Information and Regulatory Affairs about whether to propose a controversial tip pooling rule without an economic analysis, Bloomberg Law reported. Labor Secretary Alexander Acosta appealed to Mulvaney, the Bloomberg report said, after OIRA demanded the department include an analysis that estimated the total losses in tips for workers to be $640 million. The number was significantly less than DOL‘s original estimate, which was in the billions. DOL’s top leadership believed even the method leading to the $640 million figure “has a tendency toward overestimatation,“ according to a draft analysis obtained by Bloomberg. Mulvaney sided with DOL over OIRA staff, who wanted to block the rule from being proposed without any economic analysis attached. Critics of the rule said Acosta should withdraw it in light of the new revelations. “He should focus on things that promote DOL’s mission of serving working people, not undermining their earnings,” said Heidi Shierholz, an economist with the left-leaning Economic Policy Institute.
Politico Pro
March 23, 2018
The rule, which has been pushed by the Department of Labor in recent months, would legally allow employers to profit off workers’ tips — collectively pocketing an estimated $640 million more for employers — so long as the workers are at least paid the federal minimum wage. The Economic Policy institute, a progressive think tank, estimated that the real total employers could pocket could be as high as $5.8 billion.
Salon
March 23, 2018
The Trump administration’s move has been highly controversial, with Democrats arguing the proposed change would allow business owners to keep the tips for themselves. The liberal Economic Policy Institute said $5.8 billion in tips could be taken under the administration’s proposal.
The Washington Examiner
March 23, 2018
The version of the rule that lets businesses take employees’ tips would cost workers $5.8 billion each year, according to research by the Economic Policy Institute.
50 States Blue
March 23, 2018
Indeed, the OIRA’s estimate of $640 million in lost wages may be low. The Economic Policy Institute suggests the total amount diverted from tipped workers could be as high as $5.8 billion, with 80 percent of the money coming from women.
Shareblue Media
March 23, 2018
• Want to know the average cost of living where you live? Check out EPI’s calculator: You only need to plug the name of your county along with the size of your family into the Family Budget Calculator at the Economic Policy Institute to get results.
Daily Kos
March 23, 2018