Healey Fighting to Stop Bosses from Taking Wait Staff Tips, per Trump's Wish

It appears that someone high up in the Trump administration woke up one day and decided that waiters, waitresses and bartenders are making too much money from tips.

The result is a U.S. Department of Labor proposal to rescind portions of federal regulations that prohibit employers from accessing, or taking portions of, tips given to their employees.  Owners of retail establishments would be newly empowered to put all tips collected by their employees in a common pool and to decide how money from the pool would be used.

The Trump administration is positioning this change “as a boon to ‘back-of-the-house’ workers such as cooks and dishwashers,” reports Fortune magazine.  Hogwash, say the front-line workers who earn the tips by serving and pleasing the public, this is “wage theft” plain and simple.

Tipped workers would lose, in total, $5.8 billion per year in tips that could legally be pocketed by their bosses, the Economic Policy Institute estimates.

According to U.S. News and World Report, the median salary of waiters and waitress in the United States in 2016 was $19,990.  The magazine states on its web site:

“The pay for waiting tables varies greatly, considering waiters and waitresses earn customer tips. Wait staff in an upscale restaurant in San Francisco will most likely take home more cash each night than servers at a pie diner in an unincorporated rural area.  But even though they earn a combination of hourly wages and tips, waiters and waitresses don’t make much money.  According to the BLS (Bureau of Labor Standards), in 2016, servers earned an average hourly wage of $11.73, or about $24,410 for the year.  They made a median salary of $19,990 in 2016.  The highest-paid earned $38,460, and the lowest-paid made $17,090.”

The law in Massachusetts does not allow employers to share any portion of employees’ tips.  In this instance, Massachusetts law takes precedence over federal rule-making; therefore, our waiters, waitresses and bartenders do not have to worry about their employers grabbing a portion of their tips.

Massachusetts Attorney General Maura Healey is concerned, however, that, if the proposed rule change goes through, confusion among employers and employees would ensue “and may result in improper tip retention by employers” in Massachusetts.

That’s one reason Healey put her signature on a letter sent this past Monday, Feb. 5, to Trump’s labor secretary, Alexander Acosta, and to Melissa Smith, Director of the Division of Regulations, Legislation and Interpretation at the Labor Department, by 17 attorneys general from around the nation, protesting the proposed change, or “rescission,” in these rules, which have been in effect since 2011. Here’s a salient excerpt from that letter:

“The (Labor) Department’s proposed rulemaking contradicts centuries-old employee and consumer expectations about tipping and threatens to seriously injure workers and deceive consumers.  At present, tipped workers, regardless of how their base wage rate is calculated, are the lawful owners of tips and, with very limited exception, employers cannot partake in an employee’s tips.  The proposed rescission completely upends this certainty by failing to define who may participate in tip pools where a worker earns the federal minimum wage.  The Notice of Proposed Rulemaking asserts that, by providing employers with greater flexibility to allocate tips among tipped and non-tipped workers, such as cooks and dishwashers, the primary beneficiaries of rescinding the 2011 rule will be the workers themselves.  Yet, absent concrete definitions of or limitations on valid tip pool participants, the rescission would permit employers to share in such tip pools or even collect all employee tips as their own.  In fact, the Notice (of the proposed change) itself acknowledges that rescinding the 2011 rule would permit employers to use gratuities left for the servicers to ‘make capital improvements’ or ‘lower restaurant menu prices’ and notes that tips may be ‘utilized in part (or in full) by the employer.’ “

Healey says, “When customers pay tips, they expect that money to go to workers.  This proposed rule change allows employers to keep all the tips for themselves, tricking customers and depriving low-wage workers of the wages they earn.”  

No one can be surprised to see her in the thick of this effort.  Legally speaking, Healey is always to ready to knock that bright-red, oversized “Make America Great Again” hat off the president’s head. 

Regardless of whether she and her like-minded attorneys general succeed here, there’s at least a personal upside: Maura Healey’s now guaranteed to receive five-star service from the wait staff any time she’s eating out in Massachusetts!