Democrats Want Answers From Labor Dept. on Tip Sharing Secret(1)

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By Chris Opfer and Ben Penn

Sen. Elizabeth Warren (Mass.) and other leading Democrats are calling on the Labor Department to halt its new tip sharing proposal and explain why the DOL didn’t tell the public about an internal analysis showing the move could cost workers billions of dollars.

Warren in a letter to Labor Secretary Alexander Acosta said she is “alarmed and angry” about a Bloomberg Law report that the DOL dropped the analysis from the recent proposal. The DOL wants to allow tip pooling among restaurant servers and other workers who earn gratuities and back-of-the-house employees who do not. The department rolled out that proposal after ditching the analysis, which showed that the move could allow employers to skim tips by letting managers participate in the arrangements, sources told Bloomberg Law.

“If today’s report is true, and you intentionally hid this important analysis from the public, you should withdraw the proposed rule,” Warren said. She also asked Acosta to extend the public comment period on the rule, which is currently set to expire Feb. 5.

Sen. Patty Murray (Wash.), the ranking Democrat on the Health, Education, Labor and Pensions Committee, earlier in the day called on the DOL to scrap the proposal.

The DOL is committed to transparency in the rulemaking process, a Labor Department spokesman told Bloomberg Law. The department asked the public to suggest how to best measure the proposal’s impact during the comment period, the spokesman said. Supporters of the rule have said they’re skeptical that businesses would actually skim tips.

To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com

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