In late 2017, the US Department of Labour put forward a proposal that would allow restaurants to share tips between its staff, essentially allowing for the restaurant to keep some of that money for themselves, as long as each employee made the federal minimum wage of USD.25 an hour. Now the $1.3 trillion dollar spending bill authorised by US Congress and signed into law by Donald Trump has banned employers from taking any portion of tips.
Workers held a number of events protesting the law, and the Dept of Labour received 218,000 negative comments on the proposal. Workers’ rights groups were relieved with the outcome.
“We beat them,” said Saru Jayaraman, president of the nonprofit Restaurant Opportunities Center. “I think they realized how outrageous what they were proposing sounded to the public, and basically they backed down.”
However, many restaurant owners were also supportive of the move, saying that they never supported it in the first place.
“A decision by a restaurant to retain some or all of the customer tips rather than distributing them to the hourly staff would be unpopular with employees and guests alike, and it could severely damage the public’s perception of the restaurant,” wrote National Restaurant Association senior VP Angelo Amador. “We want to ensure that servers, bussers, dishwashers, cooks, and others who work as a team to provide great customer service in the industry have access to share in tips left by customers, as this legislation clearly allows.”
The law also means that employers can pool tips and distribute them among staff, as long as they also pay their staff the full minimum wage. Hospitality businesses in the US have long paid staff below minimum wage and relied on tips to top it up, meaning that kitchen workers and bussers are disadvantaged.