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Obama admin barred restaurants from forcing wait-staff to pool tips. Trump admin wants to change that back.

by Countable | 12.14.17

UPDATE – December 12, 2017: According to research by the Economic Policy Institute (EPI), employers would pocket $6.1 billion of workers’ tips under the Trump administration’s proposed "tip pooling" rule.

The proposed Labor Department rule would roll back Obama-era initiatives and move ownership of tips from servers and bartenders to restaurant owners, who would then "pool" the tips with kitchen staff. But it would also mean that as long as tipped workers earned minimum wage, employers could legally pocket their tips.

The nonpartisan, but pro-labor, EPI estimated that if the tip-pooling rule is enacted, "employers would pocket $6.1 billion in tips earned by tipped workers each year." They base this on research showing that 12 percent of tipped workers have their tips stolen by their employer and that “workers in restaurants and bars are much more likely to suffer minimum wage violations…than workers in other industries.”

Citing these kinds of concerns, restaurant workers protested the proposed rule change earlier this week.

The National Restaurant Association says "tip pooling is necessary to address the compensation gap between servers" and kitchen staff.

The public has 22 days to comment on the proposed change here.

Countable’s original story appears below.


What’s the story?

The Labor Department intends to rollback an Obama-era rule that prevented restaurant owners from pooling servers’ tips with the kitchen staff.

The public has 30 days to comment on the proposed change here.

Why does it matter?

Under current federal wage law, employers who pay the tipped minimum wage – which is lower than the standard minimum wage of $7.25 an hour – can’t pool tips and share them with non-tipped workers.

The National Restaurant Association has been fighting the rule since its inception, saying, as explained by Reuters, that "tip pooling is necessary to address the compensation gap between servers, who have been earning more as food prices increase, and untipped colleagues in the kitchen."

In its news release, the Labor Department said:

"These 'back of the house’ employees contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers."

Critics of the move say pooled wages are simply "a way to boost compensation for kitchen staff rather than paying cooks and dishwashers higher wages," as the L.A. Times reported.

"This would be a big transfer of money from workers to employers," Heidi Shierholz, who previously worked for Obama’s Labor Department, told the Washington Post.

She continued:

"The restaurant industry has wanted this forever. They want to be able to capture tips."

What do you think?

Is tip pooling necessary to "address the compensation gap between servers…and colleagues in the kitchen"? Or is this a way for employers to “capture tips”? Hit Take Action and tell your reps, the comment below. And be sure to share your comments with the Labor Department here.

—Josh Herman

(Photo Credit: andresr / iStockphoto)

Countable

Written by Countable

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(113)
  • Tim
    12/05/2017
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    A great big no on this one. A tip is a bonus paid to the person for doing an exceedingly good job. If the company wants the kitchen staff to make more money they need to pay them more money.

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  • RighteousRage
    12/05/2017
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    This is a trick on the part of restaurant owners. It sounds like it’s the fair thing to do and tipping out your bus boys, dishwashers and bar backs is proper service etiquette but giving the control over that to Managment or owners is a mistake. It WILL be used to pay people less not more.

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  • Ryan
    12/05/2017
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    I swear to God this administration has the sole purpose of becoming the most selfish and abhorrent as possible. This man and his puppets have zero shame. Get him out of office before he does permanent damage.

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  • David
    12/05/2017
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    This a way for employers to “capture tips” and boost compensation for kitchen staff rather than paying cooks and dishwashers higher wages. The wage of waitresses/ waiters should be raised to minimum wage if you're going to take away from their tips.

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  • S
    12/05/2017
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    Tips belong to the servers. Back of the house staff are compensated through the price of the food-beverage, or at least that’s the way it should work. My tip reflects the service my wait staff gave me. I don’t give it in recognition of the dish washer. While I certainly appreciate clean dishes that is something required by regulation of the health dept. The service I receive however is voluntary. Server can be rude or polite. Attentive or not. Friendly or scowling. Knowledgeable or uninformed. I reward behavior observed and received.

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  • Stacey
    12/05/2017
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    As a server I was tipped according to my performance. Sure there were percentage of the bill suggestions but service played the major role. Pooling tips isn't right. It takes the incentive of exceptional service out of the mix and rewards sub-par servers. In addition, employers are getting away with paying their cooks, bus staff, etc. lower wages. Another big business push.

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  • Myles
    12/05/2017
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    As a server in college this is a horrible idea. I work hard for my tips. I don't want to have to share the rewards of my hard work with a slacker riding my coat tails. I also think servers should be paid more hourly even in addition to tips. $2.13 an hour isn't enough to cover basic taxes.

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  • Jennifer
    12/05/2017
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    So the Trump administration doesn’t care about distributing wealth among Americans, as evidenced by the tax scam, but the administration is all for distribution of wealth in restaurants?

    Like (16)
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  • Kodiwodi
    12/05/2017
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    Absolutely not. I worked as a server for many years and my income was determined by how well I did my job. It was a team effort in only the loosest of senses. Another server might be apathetic or just getting by one night but this was paying my rent. I would have no desire to pool my income with a slacker but I bet they would love to pool their earnings with those who were high earners. As long as there will be tipped jobs, shared earnings is inappropriate.

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  • Donna
    12/05/2017
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    I was wondering when Ross would begin his attack on the average American worker. I find it laughable that the Labor Department is concerned with the inequality of pay in the restaurant industry. There is gross inequality in the pay scale in every American industry - just ask the CEOs what they make against the maintenance worker in their own company. If Ross really wanted to resolve the issue of inequality in the restaurant industry, he could push for reform by modeling it after the Europeans. In most of Europe, restaurant staff are treated like employees in any other industry. It is considered a profession. They are not forced to live on tips. They receive a living wage. I realize the restaurant owners lobby will never agree to this drastic idea because they are one of the groups that own the Labor Department. Anyone who believes they are there to protect the American worker needs to wake up and smell the coffee. Maybe once upon a time, long, long ago. Not anymore.

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  • Christy
    12/05/2017
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    No! Another way for big business to steal money out of the pocket of the lower class! Cheap Scumbag Bastards

    Like (10)
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  • Shanna
    12/05/2017
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    Wow, just when I think the current administration can't get more disgusting, they just keep proving me wrong by hitting an even lower point.

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  • Molly
    12/05/2017
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    So the employees have to pay their coworkers paychecks because the company is too greedy to do it? Tipping should be long gone anyway, workers should just be paid a fair wage and not have to worry about making enough in tips to cover basic needs.

    Like (8)
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  • Sean
    12/05/2017
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    Tipping came about from prohibition as a way for restaurants to get their servers money without it coming out of the restaurants pockets. We should get back to the point of no more tipping and just pay everyone what they should be paid.

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  • RadicalModerate
    12/05/2017
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    Wow. Way to close tax loopholes. I guess you like spit in your food.

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  • Andrew-OH
    12/05/2017
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    This is yet another example of the current administration's betrayal of those who put it in power. The pro worker rhetoric of the campaign trail and the ego boosting rally is so far from the reality of the policies enacted.

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  • Chris
    12/05/2017
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    Raise the kitchen staff's freakin' wages, you misers!!!???

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  • Vincent
    12/05/2017
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    Absolute no!!

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  • Dawn
    12/06/2017
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    So the employees have to pay their coworkers paychecks because the company is too greedy to do it? Tipping should be long gone anyway, workers should just be paid a fair wage and not have to worry about making enough in tips to cover basic needs.

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  • Billie
    12/05/2017
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    Absolutely not! Restaurants already benefit from the customer paying the bulk of staff wages now they want to add the back room staff to that. Love these businesses that care so much about their employees! You might want to remember who handles your food before you put it in your mouth.

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