A mobilization of restaurant workers and their supporters stopped a Trump administration attempt to rewrite regulations that protect tipped employees from wage theft.
President Trump’s Secretary of Labor Alexander Acosta proposed a new regulation that would have overturned an Obama-era regulation guaranteeing that tipped workers maintained controlled their tips.
Acosta’s proposal, which was supported by the National Restaurant Association (NRA), would have turned control of tips over to employers.
The NRA said that the new regulation was needed, so that restaurant owners could create tip pools that could be used to distribute tips among all restaurant employees.
But the Restaurant Opportunities Center (ROC) United, which led the successful mobilization, said that the new rule would allow restaurant owners and managers to keep a portion of the tips for themselves, which ROC called “a glaring example of a legal form of wage theft.”
The mobilization efforts by ROC caught the eye of sympathetic lawmakers Rep. Rosa DeLauro of Connecticut and Rep. Katherine Clark of Massachusetts, who put Secretary Acosta on the spot during a committee hearing.
Their questioning of Acosta led to the drafting of legislation that protected tips from employer control, the TIP Act.
Subsequently, Sen. Patty Murray of Washington and Secretary Acosta negotiated an agreement that allowed the TIP Act to be incorporated into the omnibus budget bill that Congress passed last week.
Doing so codified the portion of the Obama-era rule ensuring that employers, managers, or supervisors don’t grab their workers’ tips.
“The fact that hundreds of thousands of workers stood up and said no to employers taking their tips and that Congressional leaders listened and acted is a testament to the power of workers standing together,” said Saru Jayaraman, co-founder and president of ROC.
Christine Owens, executive director of the National Employment Law Project said that the Labor Department received 350,000 comments about the new tip rule.
According to Owens, “the vast majority” of the comments were from restaurant workers, consumers, and others who opposed the new rule.
Additionally, demonstrations by restaurant workers and their supporters opposing the new rule took place at Labor Department and NRA offices in 20 US cities.
In Washington DC, members of ROC dropped a banner from the Labor Department’s headquarters reading, “Trump, Don’t Steal Our Tips.”
The mobilization effort resulted in what Jayaraman call a “historic victory” for restaurant workers.
The proposed rule that restaurant workers were protesting would have allowed restaurant owners to create tip pools as long as they paid all employees at least the minimum wage.
Many if not most restaurants pay their tipped employees a sub-minimum wage of $2.13 an hour, which they are allowed to do under federal law.
The proposed rule also would have allowed restaurant owners or managers to take control of the tips and distribute them any way they chose including keeping some of the tips for themselves.
Doing so, reported the Economic Policy Institute, would have given owners and managers control of $5.8 billion worth of tips with no guarantee that the tips would be distributed fairly.
The agreement negotiated by Sen. Murray and Secretary Acosta and codified in the TIP Act allows restaurant owners to create tip pools if the pay all their workers at least the minimum wage, but it forbids employers, supervisors, and managers from taking and keeping any of the tips for themselves.
“This compromise will protect workers’ income and will allow for more gender and racial equity in the restaurant industry,” said Tupti Patel, a server in a Washington DC restaurant and ROC member.
Jayaraman said that “protecting workers’ tips from managerial tip theft would also protect a mostly female workforce from exacerbated sexual harassment.”
But protecting tips from management control is just one step toward making restaurant work less subject to exploitation.
Jayaraman said that the next step will be for Congress to pass the One Fair Wage, which eliminates the sub-minimum wage for tipped workers.
“The next step is that we need One Fair Wage—the elimination of the lower wage for tipped workers so that this incredibly large workforce, the majority of whom are women, is not entirely dependent on customer tips to feed their families,” Jayaraman said.