Democrats Introduce Bill to Stop Tip Skimming

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By Tyrone Richardson

House Democrats March 7 introduced a bill that would be the first legislative attempt to fix to a controversial Labor Department rule on tip sharing.

Reps. Rosa DeLauro (D-Conn.) and Katherine Clark (D-Mass.) introduced the Tip Income Protection (TIP) Act. The legislation would amend the Fair Labor Standards Act to ban mandatory tip sharing arrangements in restaurants, bars, and other workplaces and stop employers from dipping into voluntary tip pools.

The legislation follows DOL Secretary Alexander Acosta’s March 6 testimony before the House labor appropriations subcommittee. Acosta told the panel that the Labor Department would like to ban tip skimming by employers but doesn’t have the authority to do so via regulation.

The DOL has drawn sharp criticism from Democrats and worker groups since Bloomberg Law reported that the department scrapped an economic analysis showing that a proposed tip sharing regulation could allow employers to skim billions of dollars in tips.

The proposed rule would allow employers to require servers and others who earn tips to share the gratuity with those such as kitchen staff who do not. It would reverse an Obama-era regulation that asserted tips are the property of employees who earn them and can’t be distributed to the back-of-the house workers, including when tipped workers are paid the full federal minimum wage of $7.25 per hour.

Democrats have slammed the proposed rule and the decision to drop the economic analysis from it, saying the regulation would allow employers to steal worker wages. Acosta’s testimony before House appropriators included support for a legislative solution that would ban employers from pocketing worker tips. Subcommittee Chairman Tom Cole (R-Okla.) also vowed support for a legislative solution, which could take the form of a rider to the fiscal year 2018 spending bill that Congress is currently negotiating.

The TIP Act, however, would be a standalone legislation that DeLauro and Clark say could garner a quick House vote.

“Every day, workers depend on their hard earned tips to feed their families and get through school, and the least this administration can do is offer assurance that their bosses won’t steal from them,” Clark said in a written statement. “We should hold Secretary Acosta to his word and expect this administration to work with Republicans and Democrats to pass the TIP Act.”

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