DOL — Under Pressure — Extends Tip Pooling Comment Period

The Department of Labor (DOL) has extended the commentary period on its proposed new tip pooling regulation by 30 days, from Jan. 4 to Feb. 3, 2018.

dol-extends-commentary-period-on-tip-poolingThe announcement on Tuesday came after 46 Democrats from the U.S. House of Representatives wrote in a letter to Labor Secretary Alexander Acosta that repealing the rule would affect 1.3 million workers, and the 30-day comment period it proposed was too short.

The original announcement, on Dec. 4, noted that:

The department’s proposal only applies where employers pay a full minimum wage and do not take a tip credit and allows sharing tips through a tip pool with employees who do not traditionally receive direct tips – such as restaurant cooks and dish washers. These ‘back of the house’ employees contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers.  The proposal would not affect current rules applicable to employers that claim a tip credit under the FLSA.

Advocacy groups and Congressional Democrats, among others, are concerned that the proposed rule — which would allow restaurant owners to collect all tips and share (or not share) them as they see fit — could lead to wage theft.

In its proposed rule the department said that 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. 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.”

Meanwhile, 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.

In 2011, the Obama administration’s DOL issued a regulation forbidding tip pooling, which allows tips from wait staff to be shared with line cooks and others in the “back of the house.” The Trump administration now seeks to reverse this rule.

 

 

 


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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