NELP Responds to Tip Credit Rule

The below statement can be attributed to Christine Owens, the Executive Director at the National Employment Law Project:

“Today the Trump Administration once again sided with businesses and corporations over workers, proposing a rule that constitutes a wholesale attack on restaurant workers and the meager federal protections they have for their pay. Worse, DOL is trying hard to hide how much this change in existing protections will cost workers as it tries to sneak this rule through an extraordinarily short public comment period over the holidays.

“Tips belong to the workers who have earned them—period.  But today the Trump Labor Department has proposed a pathway for employers to keep the tips for themselves.  The department rationalizes that the proposed rule as a way to let some employers redistribute tips to workers who don’t traditionally get tips, but the effect of the proposal would be to let those employers pocket a portion of tips.  If companies have trouble retaining non-tipped workers because their pay is so low, the solution is for the companies to raise the wages of those workers—not for the labor department to rig the rules so employers can essentially steal earnings from tipped workers to subsidize the businesses’ low wage model.

“Adding insult to injury, DOL has not provided an estimate of how much this rule is going to cost restaurant workers and benefit big restaurant chains. That kind of estimate isn’t just required by law – it’s also essential information the public needs to make informed comments about the proposal. In light of this significant and inexcusable omission, DOL must  withdraw this proposal until it calculates and discloses the estimated impact of the proposed rule. DOL should not propose and OMB and OIRA should not permit publication of a proposed rule that does not include the legally required economic analysis.

“Far from ‘draining the swamp,’ with this proposal, the Trump Administration has put the corporations and the National Restaurant Association front and center in changing the basic legal standards that exist to protect workers and their wages.  Tips belong to workers, period. All this proposal will do is make it harder for tipped workers to get by—yet another example of the Trump Administration’s elevation of corporate interests over those of working people.”

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