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The Trump Administration Wants to Take Servers’ Tip Money Right Out of Their Pockets

AlterNet – by Christine Owens, Sharon Block, Newsweek

If the Trump administration has its way, the tip you leave your waiter or waitress could end up in the pocket of the restaurant owner instead of the person who served you.

This week, Trump’s Labor Department proposed rescinding an Obama-era rule that made the logical point that tips are the property of the servers and cannot be taken by the restaurant owner.  

The administration’s proposal would allow restaurant owners who pay their wait staff as little as $7.25 per hour to collect all the tips left by patrons and do whatever they want with them—regardless of what diners intended.

Restaurant owners could even keep all the tips for themselves, without telling diners.

Coming on the heels of the massive tax bills recently passed by the House and Senate, this “reverse Robin Hood” scheme—which will take money out of the pockets of low-wage workers and give it to business owners–is just one more example of “trickle-down” economic policy masquerading as pro-worker reform.

Like the tax bills, the DOL proposal sets the table to transfer income and wealth from those least able to afford it to corporations and the very wealthy.

Servers in restaurants are among the lowest-paid workers in our economy. The median hourly wage for waiters and waitresses was less than $10 per hour in 2015, according to the Bureau of Labor Statistics. They are hardly the kind of workers who should be subsidizing the profits of their bosses.

But the National Restaurant Association—the “other NRA”—lobbied for this result. The only question now is whether Labor Secretary Alex Acosta will go along with this swindle, or whether he will give the public enough information to have a fair chance to weigh in.

This is a bad policy that the administration is trying to hide behind a very bad process. Despite the fact that the law requires it, the Labor Department’s proposal includes no estimate of how much money in tips will be transferred from servers to restaurant owners—many of which are big corporations, not mom and pop—as a result of the rule. Instead of providing an estimate, the proposal provides numerous excuses for hiding the rule’s real impact from the public.

First, DOL claims that it can’t be exactly sure how restaurant owners will implement the rule—which is true, but no excuse for not trying. Every rule has uncertainty baked in—that’s why the accompanying economic analyses are called “estimates.”

The public is entitled to understand the relative magnitude of the changes being proposed so it can comment on the proposal in a meaningful way. But so far, the public has been left in the dark.

Second, while DOL acknowledges that employers may keep some of the tips “to make capital improvements,” cut costs or increase work hours (speculation it spins as a win for workers even while admitting some tipped workers will lose pay), it also suggests restaurant owners may redistribute the tips to “back of the house” employees—dishwashers, cooks, and others who don’t interact with diners.

DOL may be partly right—we don’t know if some of that transfer will happen—but that possibility doesn’t excuse DOL from making a best effort to estimate how much.

Sadly, some restaurant owners already routinely steal tips from servers, even without the blessing of the government. If the proposed rule takes effect, even more restaurant owners would feel they have a blank check to siphon tips away.

So, why is the Trump administration skirting the law and dodging the numbers?

It’s especially puzzling given that Secretary Acosta has written eloquently on the need to follow the law and established procedures when repealing regulations. Likewise, the head of the White House agency that reviewed this rule, OIRA Administrator Neomi Rao, expressly testified at her Senate confirmation hearing that this kind of cost-benefit analysis is important even in deregulatory actions.

If we take them at their word, Secretary Acosta and Administrator Rao have no choice but to withdraw this proposal and reissue it—if at all—with a good-faith economic analysis. Otherwise, they’re sending a signal that they don’t want you to understand the stakes here.

Considering that food service workers earn tens of billions of dollars in tips each year, it’s not impossible that restaurant owners could end up skimming hundreds of millions or even billions of dollars each year from servers. The results could ripple across the economy, hurting families and local businesses and placing new demands on social service programs.

The implications of this potential rule change are too great to ignore, either within the administration or among workers and consumers.

Restaurant customers shouldn’t allow the Trump administration to make them complicit in stealing from their servers to pad the pockets of the owners. This proposal can’t go into effect until the public has a chance to comment on it.

Before the next time you go out to dinner, please take a minute to tell Secretary Acosta, Administrator Rao and President Trump: I want my tips to go to the person who worked hard to serve me, not to the restaurant owner.

Sharon Block is Executive Director of the Labor and Worklife Program at Harvard Law School. She was Counselor to Secretary of Labor Tom Perez and led the policy office, among other positions at the Labor Department and the White House during the Obama Administration.

Christine Owens is the Executive Director at the National Employment Law Project.

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16 Responses to The Trump Administration Wants to Take Servers’ Tip Money Right Out of Their Pockets

  1. # 1 NWO Hatr says:

    “Restaurant owners could even keep all the tips for themselves, without telling diners.”

    If they do, they should be beaten to a bloody pulp with a Louisville Slugger.

    The only way they could LEGITIMATELY keep ANY tip would be if THEY served the patrons THEMSELVES.

    More sewage from the head sewer rat.

  2. SKYWALKER says:

    Many restaurants have already been fined big time for keeping tips. Chickie and Pete’s kept over 5 million in servers tips, was fined about the same plus had to pay out the same amount to the employees. Even Chef Mario Batali who has a net worth of 25 Million, did the same thing and had to fork over 5.25 million to staff. Greed is all it is, on the backs of those who can least afford to live off their measly wages…..

  3. Enemy of the State says:

    What was it that Hillary said
    Something about putting a bunch of coal miners out of work

    See how that backfired in those states for her ?

    This is just more like it
    Stupid shit from the mouths and minds of the brain dead politicians

  4. galen says:

    We aught to ask at each restaurant if the waiters and waitresses get to keep their tips. If not, that institution should be boycotted. The owners are interfering with our interaction with those who bring us our food, and for the most part, make for a nice dining experience. And of course, at the top, Gov prompting the take and frothing at the mouth for its share. Take, take, take, TAKE!!!


  5. Mary in ND says:

    Use cash for tips….hand it directly to waiter/waitress

    • SKYWALKER says:

      Unfortunately, many restaurants already figure in the tip as part of the bill. They tried that with me once and I refused to pay it opting to only pay for what i ordered. They threatened to call the police so I told them to go ahead as I paid for my food but was not going to be strong-armed into paying the tip also—-walked out after they told me to never set foot in the place again and I have not….

  6. Volthair says:

    Ain’t greed great..scum

  7. flee says:

    Well I guess this means shittier services and food at his and his friends casinos.

    Well I gotta tip to steal…for ya.

    There’s gonna be a lot more people using hamburger buns to wipe there azz at the fast food restaurants…

    Because they can’t afford toilet paper anymore.

    There’s a tip for ya.

    Oh.. and they need to put …wash your hands for employees in Spanish in the bathrooms at Taco Bell.

  8. ubeteda says:

    this is typical journalistic bullcrap. i’m sure some dumbass slipped it into the bill but is extrapolated to mean something that it might not.

    here’s the loophole in the story….

    “The administration’s proposal would ALLOW restaurant owners to collect tips”

    allow and force are two different meanings.

    look again at the authors of the story.

    i’m surprised that there is no mention of climate change or russian collusion in the story

  9. reenie says:

    Thanks again Trump, I voted for you because you said you would lower the taxes on the middle class but because I live in CT. my taxes may go up, now you want to screw servers out of their tips. I CT if you are a server in a casino your hourly wage is under $5.00, good luck with getting anyone to do this work for that.
    I thought I would be voting for you in 2020 but I probably will not vote at all, that would be a first for me. Our government is corrupt and a bunch of liars, they don’t work for us but for themselves and the top 10%, screw them all!

    • jack frost says:

      Hi maybe your new , but just listen to Henry’s show see what his take on old Trumpy boy .

    • Enemy of the State says:

      Just quit voting, your not helping yourself or anyone else for that matter
      Funny thing is , Im 54.. i learned this when i was 18, some people really are slow learners

      answer me this

      when was the last time you actually got what you voted for ? ever?

      me neither , thats why i quit giving credence to their bullshit con game ,, to keep playing a game to keep losing is usually in psephologist speak , a mental issue

  10. Katie says:

    Mary yrs. ago I waitressed and it was mainly due to the money I’d walk out with every shift. Believe me, without the tips incentive most people would not willingly serve tables. It is very stressful most of the time.

    These people are complete robbers!

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