December 4, 2017 / 7:59 PM / a year ago

Trump administration proposes rollback of tip-pooling rule

    By Daniel Wiessner
    Dec 4 (Reuters) - The U.S. Department of Labor on Monday
proposed eliminating an  Obama administration rule that allowed
restaurant employees to keep their tips instead of being forced
to share them with non-tipped workers, saying the rule had
contributed to pay disparities between servers and other staff
like cooks and dishwashers.
    Employers who pay the tipped minimum wage, which is lower
than the standard minimum wage of $7.25 per hour, cannot pool
tips and share them with non-tipped workers under federal wage
law. The Obama administration rule, which was adopted in 2011,
also banned the practice for businesses that pay the higher
minimum wage.
    The ban on tip-pooling is the latest labor regulation that
was seen as helping workers to be targeted by the Trump
administration. The Labor Department in July took the first
steps toward repealing an Obama administration rule that would
have extended mandatory overtime pay to more than 4 million
workers.              And in August, the administration blocked
a rule that would have required companies to report employee
wage data broken down by sex and race.
    The department had already stopped enforcing the tip-pooling
ban nationwide in July. 
    Tipped workers are among the most vulnerable workers in the
country, said Saru Jayaraman, president of the union-backed
Restaurant Opportunities Centers United. Repealing the rule
would leave them even worse off, she said.
    "By allowing employers to take control of their employees'
tips, this regulation would push a majority-women workforce ...
further into financial instability, poverty, and vulnerability
to harassment and assault," she said in a statement. 
    A spokesman for the Labor Department did not immediately
respond to a request for comment.
    The department said its proposal would be formally published
on Tuesday, kicking off a 30-day public comment period. 
    The rule has been criticized by industry groups who say tip
pooling is necessary to address the compensation gap between
servers, who have been earning more as food prices increase, and
untipped colleagues in the kitchen.
    But the Trump administration could face legal challenges
from workers' rights groups if it does away with the ban. 
    Christine Owens, the executive director of the National
Employment Law Project, said in a statement the proposal did not
indicate how much money tipped workers could lose if the rule is
eliminated, which is required by federal law.
    The U.S. Supreme Court is considering whether to review a
challenge to the tip-pooling ban by the National Restaurant
Association and other groups. 

 (Reporting by Daniel Wiessner in Albany, New York
Editing by Alexia Garamfalvi and Matthew Lewis)
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