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Report: Tip pool rule could stiff servers out of $6 billion

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in Compensation and Benefits,Human Resources

The Department of Labor suppressed results of internal research showing that a new proposed tip pooling rule could deprive restaurant servers of $5.8 billion in tip income every year, according to a report by Bloomberg Law.

The DOL wants to rescind an Obama-era rule that forbids employers from organizing tip pools to spread a portion of servers’ gratuities to back-of-the-house employees such as cooks and dishwashers.

Critics of the Trump administration’s new rule—public comments on it closed Feb. 5—say business owners could simply confiscate tips. Compulsory tip pooling would be legal as long as employees earn at least the federal minimum wage and employers don’t apply a tip credit, which allows them to pay as little as $2.13 per hour.

Bloomberg Law says the research on projected tip shortfalls was purposely omitted from the notice of proposed rule-making issued in December 2017. Read the full report at tinyurl.com/bloomberg-tips.

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