TIP-POOL ESTIMATE SINKS: The left-leaning Economic Policy Institute revised downward its estimate of the economic impact of a tip-pooling rule change on Thursday. The group estimates $5.8 billion in workers tips will be lost to employers rather than its original estimate of $6.1 billion. The change comes from taking into account “more protective state laws” against tip crediting in Montana and Washington. DOL has yet to publish a quantitative analysis of the proposed rule change, which would allow employers to redistribute tips to back-of-house employees. Read the report here.
Politico
December 18, 2017
Trump’s Labor Department Says Employees Don’t Own Their Tips
Truthout/Michael Arria
Trump’s tip-pooling move would give more power to businesses in an industry where wage theft is already rampant. The Economic Policy Institute (EPI) recently released a report that assessed minimum wage violations in the 10 most populous US states. The EPI found that 2.4 million workers are reportedly paid less than the minimum wage in their state. This amounts to about $8 billion in stolen wages every year and, if these states’ numbers are in line with the rest of the country, the national number is probably around $15 billion. According to some studies, one in five workers is already having their tips stolen. This reality is set to get worse with Trump’s Labor Department making decisions and a powerful industry group guiding policy.
Truthout
December 18, 2017
“Consider a common employment arrangement in which a staffing agency hires a worker and assigns her to work at another firm. The staffing agency determines some of the worker’s terms of employment (such as her hiring and wages), but the other firm directs her daily tasks and sets her schedule and hours,” Marni von Wilpert, of the left-leaning Economic Policy Institute, explained in a blog post.
CBS Moneywatch
December 18, 2017
However, there is no guarantee employers would redistribute pooled tips and critics say economic models show they will likely pocket them instead. “We estimate that under this rule, employers would pocket $6.1 billion in tips earned by tipped workers each year,” according to a new analysis from nonpartisan think tank the Economic Policy Institute. This equates to 17% of the estimated $36.4 billion in tips earned by tipped workers annually. “The big lie is that it will lead to restaurants sharing these tips with back of house,” Heidi Shierholz, senior economist and director policy at the Economic Policy Institute said. “The biggest effect of it will be employers being able to control tips and take a big chunk of them as long as they pay the minimum wage.” The proposal would require staff to make minimum wage but allow tips to be pooled beyond that.
Market Watch
December 14, 2017
Critics of the Trump administration’s proposed rule say that it goes further than just allowing employers to include nontipped workers in the tip pool. They say employers could do whatever they want with the tips—they could keep a portion for restaurant improvements or share them with salaried managers. On Dec. 12, Sen. Jeff Merkley, D-Ore., and Rep. Keith Ellison, D-Minn., joined worker advocates in a press conference on Capitol Hill to protest the rule. The Economic Policy Institute has tweeted against the proposed rule.
Society for Human Resources
December 14, 2017
Democracy Journal/Thea Lee and Hunter Blair
Democracy Journal
December 14, 2017
The rule was proposed by the Department of Labor on Dec. 5 and, at face value, seems like a fairly straightforward way to enable tip-sharing. Restaurants would be able to pool tips, so they could be split among servers, dish-washers, and cooks. But, as written, the rule doesn’t require that employers distribute those pooled tips to workers at all. In fact, according to a report by the Economic Policy Institute, the rule would allow employers to legally pocket those tips. (EPI cited throughout)
Bustle
December 13, 2017
The Economic Policy Institute, a progressive research nonprofit, released a report Tuesday arguing the proposal would allow employers to legally pocket tips at an estimated $6.1 billion annually. The National Employment Law Project released a statement the same day claiming the rule would allow for wage theft in tipped industries.
Inside Sources
December 13, 2017
Using W-2 data and economic logic, the Economic Policy Institute estimated in a report issued Tuesday that the rule will lead employers to steal about $6.1 billion in workers tips a year.
The Hill
December 13, 2017
$6.1 billion
President Trump’s Department of Labor has proposed a rule that would allow restaurants to take the tips from servers and redistribute them among un-tipped staff such as dishwashers. But it doesn’t require that those tips be redistributed among un-tipped staff — so legally, as long as the tipped employees are paid minimum wage, the restaurants can just keep the confiscated money. The Economic Policy Institute estimates that under the new rule, employers would pocket about $6.1 billion in employees’ tips annually, or some 16.9 percent of all annual tips. [Economic Policy Institute]
FiveThirtyEight
December 13, 2017