Washington State Attorney General Bob Ferguson and 16 of his counterparts say the Trump administration threatens to hurt workers and mislead customers with a proposed rule about tipping.
The attorneys general wrote a letter to the Department of Labor Monday opposing a proposed rule about what happens to tips left for servers, bartenders, and other workers. Trump's DOL is considering reversing an Obama-era rule about tip pooling. The change would allow employers to redirect tips away from workers who usually get them either to other workers or back to the bosses, so long as employees make at least the minimum wage.
Supporters of the rule change say it could allow employers to pay back-of-house workers who make lower wages more; opponents and labor advocates say it will allow bosses to cut themselves into the tip pool and take money out of the pockets of workers. The controversial rule took on a new element of intrigue last week when Bloomberg reported that the Department of Labor hid its own analysis finding the change could cost workers billions. The Department of Labor’s Office of Inspector General is now looking into the rulemaking process. Meanwhile, the progressive Economic Policy Institute estimates that employers would keep $5.8 billion a year in tips that would otherwise go to workers.
The AGs' letter says the change "would greatly harm millions of employees in the United States who depend on tips and would create the real potential for customers to be deceived as to whom will receive and benefit from their tips."
While some states still allow businesses to pay below the minimum wage if workers get tips to make up the difference, Washington, California, and several other states require bosses to pay the minimum wage before tips. In Washington, if employers charge service fees that they keep, they must disclose that to customers on receipts and menus. If customers leave tips for employees, Washington state law bars employers from keeping those tips.
The AGs write that if the DOL goes ahead with the new rule, it should at least say tips can be redistributed to other employees but not to the boss.
The attorneys take different positions on the practice of tipping itself, the letter says, but all oppose the rule change in part because customers expect that the tips they leave go to workers.
"Tipping has always been about paying the server, rather than the host;" the attorneys general write, "the checkroom clerk, rather than the contractor; and the waiter, rather than the restaurateur."