On the Labor Department’s Proposed Tip Rule

Following is a statement from Judy Conti, director of government affairs with the National Employment Law Project:

“Today, the Trump Administration’s Department of Labor announced a proposed rule that would make it possible for employers to assign some workers excessive amounts of non-tip-generating work, while still paying them a subminimum wage of only $2.13 per hour, robbing them of the opportunity to make the best wages possible during their shifts. This will impact not only restaurant and food service workers, but workers making as little as $2.13 per hour in nail salons, car washes, delivery, airport services, and other jobs that rely on customer tips to supplement the minimum wage.

“The restaurant industry has long been marked by high levels of wage and hour violations, with tipped workers being particularly vulnerable to wage theft and other practices that rob workers of their opportunity to earn decent wages. Unfortunately, today, DOL is proposing regulations that make it perfectly legal for employers to take advantage of tipped workers and have them perform excessive amounts of non-tip-generating work while being paid only $2.13 per hour.

“For over 30 years, the Department has consistently enforced what is known as the 80/20 rule, which mandates that when a tipped workers is assigned non-tip-generating ‘side work’ that takes up more than 20 percent of their time, then the employer cannot take the tip credit and must instead pay the worker the full minimum wage. The National Restaurant Association has long fought the 80/20 rule and found a friend in the Trump Department of Labor.

“Just 18 months ago, NELP was pleased with the DOL’s historic agreement that made it clear beyond any doubt that employers cannot steal tips from their workers and use that money for their own purposes. We applauded the Department for working across the aisle with Senator Patty Murray on this piece of legislation. We will scrutinize the portion of the proposed regulation dealing with this compromise to ensure that they faithfully implement the bargain struck and embodied in legislation.

“While NELP remains committed to the letter and spirit of the compromise struck last year to protect tipped workers, we are extremely disappointed, though not surprised, that DOL is again doing the bidding of corporate America rather than the workers it is supposed to protect.

“Thankfully, it’s not too late. This is only a proposed rule and we hope that DOL will pay careful attention to the many comments we know it will receive in opposition to this policy and instead, enshrine the 80/20 rule in a permanent regulation.”

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