Statement | Unions and Labor Standards

News from EPI Congress should pass bill with protections for tipped workers

Today Congresswomen Rosa DeLauro (D-CT) and Katherine Clark (D-MA) introduced a bill which would amend the Fair Labor Standards Act to provide protections for tipped workers, by clarifying that tips are the property of employees and may not be confiscated by employers.

We urge Congress to pass this bill. The Department of Labor has proposed a rule that would abolish the current regulation that prohibits employers from taking workers’ tips. We estimate that if DOL finalizes its proposal, workers will lose $5.8 billion in tips every year as tips are shifted from workers to employers, and of the $5.8 billion, nearly 80 percent—$4.6 billion—would be taken from women who are working in tipped jobs.

Secretary Acosta has asserted that the department does not have the statutory authority to prohibit employers from taking workers’ tips, essentially admitting that the department’s proposed regulation would leave employers free to legally line their pockets with their workers’ tips. We do not agree with Secretary Acosta’s interpretation that the department lacks this statutory authority.

At a House Appropriations subcommittee hearing Tuesday morning, Labor Secretary Alexander Acosta said he would support Congress in passing legislative language clarifying that employers can’t take workers’ tips, and subcommittee chairman Tom Cole agreed. Acosta needs to stand by his statement—and the mission of the department he oversees “to foster, promote, and develop the welfare of the wage earners…of the United States”—and unconditionally refuse to finalize the rule that would strip protections from tipped workers until this bill is passed. Anything less would show that he is willing to put the interests of restaurant owners above those of the workers that his department is supposed to protect.

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