NEWS-SENTINEL EDITORIAL: Who should your tip go to at a restaurant?
You’ve just received exceptional service from your waitress at a local restaurant. When you receive your bill, you want to let her know beyond your “thank you” that you were pleased, so you tip her extra well.
What if that tip money was pooled at the end of the day with all other tips and distributed evenly among not only the wait staff but the cooks and dishwashers as well?
A new rule proposed by the Department of Labor could make that happen. Under the proposed rule, workplaces would have the freedom to allow sharing of tips among more employees to help decrease wage disparities between tipped and non-tipped workers. That option is currently restricted by a rule promulgated in 2011 that declared tips the property of the workers who collect them. That rule states that “the employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than that which is statutorily permitted: As a credit against its wage obligations to the employee, or in furtherance of a valid tip pool.”
The department’s proposal announced Monday 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 “back of the house” employees who “contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers.”
Paul DeCamp, a Washington lawyer who represents the National Restaurant Association and previously worked for the George W. Bush administration’s Labor Department, told the Washington Post that pooled tips are actually ways to support more lower-paid workers, such as those who work in the kitchen.
But the rule proposal has triggered a backlash among worker advocates, who argue that the Department of Labor’s move opens the door for companies to absorb their employees’ tips. And the same critics see servers losing out in a tip-free trend gaining traction across the country, too, where restaurants may increase menu prices in order to pay their staff more across the board.
Michael Saltsman, research director at the Employment Policies Institute, wrote in the Wall Street Journal last year that a 2016 survey of 3,000 U.S. consumers by Horizon Media found that 81 percent prefer the status quo to a tip-free alternative.
“My organization used Google’s Consumer Survey tool to poll roughly 2,500 self-reported restaurant employees who earn tips,” he said, “and nearly 60 percent rejected even a $15 minimum wage if it meant they couldn’t receive tips.
The current rule proposal was published in the Federal Register Tuesday and is available for public comment for 30 days. The proposal and procedures for submitting comments, can be found at the Department of Labor’s Wage and Hour Division’s Proposed Rule website HERE.