In December of 2017, the Department of Labor (DOL) issued a proposed rule that would make it legal for employers to pocket their workers’ tips.
In a highly unusual move, DOL did not provide an estimate of the amount of tips that would be shifted from workers to employers as a result of the rule—even though they were required, as a part of the rulemaking process, to assess all quantifiable costs and benefits to the fullest extent possible. DOL claimed they could not do an analysis. This claim was always highly suspicious, particularly given that EPI produced an estimate using a methodology that is very much in the spirit of estimates the Department of Labor regularly produces.
Thanks to excellent reporting, we now know that DOL did produce an estimate, which showed that the rule would be terrible for workers, shifting billions of dollars from workers to employers—so they scrubbed it. In so doing, they ensured that workers, advocates, and anyone else who wants to comment on the proposal would have to do so without key information about the impact of the rule.
This shows the lengths to which the Trump administration and Secretary of Labor Alexander Acosta will go to hide the fact that they are taking steps to actively make workers’ lives worse.
EPI’s analysis shows that if the rule were finalized: (1) tipped workers would lose $5.8 billion a year in tips, with $4.6 billion of that coming from the pockets of women working in tipped jobs; (2) the take-home pay of back-of-the-house or other nontipped workers would remain largely unchanged, and (3) restaurant owners and other employers of tipped workers would get a $5.8 billion a year windfall.
DOL should release its analysis immediately or, better yet, withdraw its proposal and refocus on its mission of serving working people, not big business.