The Building Tradesman Newspaper

Friday, March 09, 2018

AFL-CIO says rule would slide $5.8 billion in tips over to employers

By The Building Tradesman

The AFL-CIO is opposed, "in the strongest possible terms," to a new proposed Department of Labor regulation that would allow restaurant owners to pocket the tips of millions of tipped workers. It would result in an estimated loss every year of $5.8 billion in transferred wages.

"The AFL-CIO strongly urges the Department to withdraw the proposed rule, and instead focus its energies on promoting policies that will improve economic security for people working in low-wage jobs and empower all working people with the resources they need to combat sexual harassment in their workplaces," the labor federation said.

President Donald Trump's Labor Department says that restaurant owners would be free to pay their tipped workers a commensurate wage to make up for the lost tips, which can be distributed to other restaurant staff, like cooks and dishwashers. However, nothing in the proposed regulations forces restaurant owners to do anything with the windfall in tips; they can pocket the money if they want.

And most of that money would come from pockets of women, who are already underpaid compared to men. The AFL-CIO points out that nearly 70 percent of tipped workers are women, and a majority of them work in the restaurant industry, "which suffers from some of the highest rates of sexual harassment in the entire labor market. This rule would exacerbate sexual harassment because workers will now depend on the whims of owners to get their tips back," the AFL-CIO said. 

Public comments on the revised tipping rules ended last month as part of the ongoing process of its "Notice of Proposed Rulemaking."

The AFL-CIO pointed out "an extremely disturbing report" from Bloomberg/BNA, which said that the Department of Labor "scrubbed an unfavorable internal analysis from a new tip pooling proposal, shielding the public from estimates that potentially billions of dollars in gratuities could be transferred from workers to their employer."