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
DEMOCRATS RALLY AGAINST TIP-POOLING: Democratic congressmen and worker advocates will protest the Trump administration’s plan to overturn a rule against tip-pooling today on Capitol Hill. Sen. Jeff Merkley (D-Ore.) and Rep. Keith Ellison (D-Minn.) will appear at a press briefing alongside representatives from the Restaurant Opportunities Center, the Economic Policy Institute, and NELP. Forty-six Democratic lawmakers signed a letter Monday calling on the DOL to extended the comment period on the tip rule change. Over 200 organizations also signed a separate letter asking for a 30-day extension.
Politico
December 13, 2017
“Under the administration’s proposed rule, as long as tipped workers earn minimum wage, employers could legally pocket those tips,” said analysts with the Economic Policy Institute. “We estimate that under this rule, employers would pocket $6.1 billion in tips earned by tipped workers each year.” (EPI cited throughout)
The Washington Examiner
December 13, 2017
The Obama administration change banned tip-pooling even for businesses that pay the federal minimum wage, and the Trump administrations now wants to eliminate the Obama administration rule and allow employers once again to pool tips only for workers who are paid the tipped minimum wage. According to the Economic Policy Institute (EPI), employers could keep between $563 million and $14.2 billion in tips annually. The EPI’s best estimate is a loss to tipped workers of $6.1 billion. (EPI cited throughout)
Wall St. 24/7
December 13, 2017