Last Labor Day The Nation.com took stock of what the Trump administration is doing for workers right… erm, make that doing to workers rights, and came to the conclusion that the rollback of labor rights and protections since Trump took office is staggering.
And now just in time for Christmas, Trump McScrooge and his anti-labor elves have rolled back an Obama labor regulation that let restaurant employees keep their tips instead of pooling them with non-tipped workers. They claim the Obama regulation had contributed to pay disparities between servers and other staff like cooks and dishwashers. Interestingly, though, Trump’s Dept of Labor supposed effort to change that will also allow employers to legally keep all the tips for themselves provided the tipped workers earn the minimum wage.
Vox media’s Eater.com explains how it works: A big problem with the new regulations is that employers may now legally pocket tips. Under the traditional paradigm, an employer takes the tip credit, pays all of their “service-facing” employees $2.13 an hour plus tips, and pays cooks and dishwashers $7.25 an hour, no tips (the numbers would be different according to minimum wage laws state to state, but this is the general idea).
But if they decide to follow the DOL’s new rule and they don’t take the tip credit, and instead pay minimum wage of $7.25 an hour to all their employees, then tips are no longer considered the property of the employee; they become property of the employer. That employer could split those tips between back and front of the house. Then again, the employer could also keep them all.
The industry owners group the National Restaurant Association (yes, the other NRA) favors the Trump rule change. They have acknowledged the “loophole” that just happens to favor their members but haven’t asked for it to be corrected.
At the national level the NRA for years has helped keep the federal minimum wage for tipped employees steady at $2.13 per hour since 1991. And they actively fight states efforts to hike their minimum wage and to pass paid sick-leave legislation. In the 2016 election cycle the group contributed $960,980 to the GOP, which is 81 percent of their total contribution to political parties for that period.
Commenting on the new “loophole,” The Economic Policy Institute points out: Recent research suggests that the total wages stolen from workers due to minimum wage violations exceeds $15 billion each year, and workers in restaurants and bars are much more likely to suffer minimum wage violations than workers in other industries. With that much illegal wage theft currently taking place, it seems obvious that when employers can legally pocket the tips earned by their employees, many will do so.
It’s almost as if the restaurant owners’ generous service to the GOP just earned them a big tip from Trump’s Dept. of Labor. Keep the change, boss.