Labor Department extends comment period for tip pooling rule amid backlash

The Labor Department Tuesday said it’s giving the public more time to comment on its proposal to roll back an Obama-era rule that bans employers from pooling workers’ tips, following requests from House Democrats and worker advocates.

The agency said on its website Tuesday it’s extending the comment period from 30 to 60 days to give the public more time to comment on its proposal to change the Fair Labor Standards Act and allow employers to pool the tips of workers who make at least the federal minimum wage, which is $7.25 an hour.

The rule has ignited a fight on Capitol Hill over fair wages and the tip ownership.

Worker rights advocates and congressional Democrats are slamming the Trump administration for catering to the wishes of the National Restaurant Association and proposing a rule that will allow employers to steal workers’ tips.{mosads}

“Time and time again we see team Trump fighting for the powerful against the people of the United States of American and here’s a terrific example,” Sen. Jeff Merkley (D-Ore.) said.

In proposing the rule, the Labor Department said it aims to allow employers to share tips with employees who typically don’t earn tips, like the dishwashers and cooks in the kitchen.

But Saru Jayaraman, co-founder and co-director of the Restaurant Opportunities Centers (ROC) United, said there are no protections in the proposed rule against employers taking a share of the tips.

In a statement, Angelo Amador, executive director of the Restaurant Law Center, said the ROC United is on the wrong side of the issue.

“Confining tips to just servers creates a disparity between servers and those in the back-of-the-house washing dishes and preparing the meal,” he argued.

“They’re all working towards the same goal of providing a great guest experience.”

In its proposed rule the department said it “does not attempt to definitively interpret individual state law, and is therefore unable to determine to what extent state law will affect employer behavior in light of the proposed changes.”

“It is assumed, however, that about 30 percent of all waiters and waitresses and bartenders work in states that prohibit employers from obtaining tips received by employees,” the agency continues. “In these states, employers must continue complying with state law, and therefore tipped employees in these states may not be impacted by the changes proposed.” 

A Labor Department spokesperson told The Hill employers should not, and as a practice do not, keep tips.

“Congress never gave the department express authority to regulate in this space,” the spokesperson said. “As a general matter, the government should have an affirmative grant of authority to regulate and not regulate based on congressional silence.”

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.

Jayaraman said there’s already evidence of employers taking tips.

“We’ve surveyed close to 10,000 workers across America and one in five reported their employers taking a portion of their tips in a world in which it’s illegal,” she said.

Jayaraman said 70 percent of tipped workers in America are women and that on top of suffering from three times the poverty rate of the rest of the U.S. workforce, with median wages hovering around $9 an hour, they experience the highest rates of sexual harassment of any industry in the country.

“We are going through this MeToo moment and it’s important to recognize that the largest workforce of women … are still struggling every day because they must tolerate anything and everything a customer does to them in order to feed their families in tips,” she said, referring to the social media campaign urging people to share their stories of sexual harassment in the wake of allegations that have brought down powerful men in Congress, the media and Hollywood.

ROC United has produced a video with actress Jane Fonda urging people to text “Tip” to 225568  to comment on the proposed rule. Jayaraman said more than 33,000 comments were submitted in three days.

Though the Labor Department is giving the workers more time to comment, ROC United still criticized the agency for releasing a rule during the busiest time of year for restaurant workers.

“While we got a 30-day extension, it’s still an incredibly difficult and, in our opinion, sneaky time to try to push this through when restaurant workers are slammed,”  Jayaraman said.

A Labor spokesperson said the timing of the rule had nothing to do with the holiday season.

Rep. Keith Ellison (D-Minn.) said in this political environment it’s difficult to get legislation through to maintain the tip pooling ban.

“The National Restaurant Association is a powerful group and they basically advocate for workers to get less … Of course we’ll try but we’re really realistic. We know who’s in the majority.”

– This report was updated at 3:23 p.m.