A few weeks ago, we reported that the Department of Labor (DOL) had proposed legislation to make it legal for business owners to collect restaurant workers tips as long as they are paying them at least the minimum wage.
Allegedly, the inspector general is now investigating claims that the DOL tried to hide an internal analysis that estimated that tipped workers as a whole would make billions of dollars less. In a recent report from “Bloomberg,” the publication said that the DOL purposely did not publish the cost-benefit analysis like they usually do because the rule was determined to be detrimental to tipped workers’ income.
The Economic Policy Institute already published a report with an analysis.
"We estimate that if the rule is finalized, every year workers will lose $5.8 billion in tips, as tips are shifted from workers to employers. Of the $5.8 billion, nearly 80 percent—$4.6 billion—would be taken from women who are working in tipped jobs," writes the "Economic Policy Institute" (EPI.)
Hundreds of thousands have given the DOL feedback regarding the rule and the comment period ended earlier this week.
Although tipped workers are up in arms about the rule, operators and proponents are arguing that if they can collect the tips, then they can be shared more equally among staff.
The discrepancy between tipped workers and non-tipped workers in the kitchen remains a big issue in the industry. Most restaurants in the U.S. require that wait-staff share tips with front-of-house, but not with the back-of-house staff.
"There's 20 percent of what a business generates, we have no ability to impact at all, traditionally," said Kurt Huffman, an Oregon restaurateur to “NPR.” "I think all of us see this as a way to reallocate the tips a little bit more fairly to level out the wage inequity.”
Critics of the rule argue that since the rule doesn’t require that the tips are distributed, there is no way to make sure that operators don’t just pocket the tips. This would be tempting since the profit margin for restaurants is low.
The public had its chance to give feedback, now the department will read through the comments before prepping the final rule that will then have to pass through government chambers.
Read more from “NPR.”