DOL Did Not Survey Bosses About Grabbing Worker Tips
The Trump administration Labor Department did not survey the “quantitative” impact of letting bosses grab workers’ tips before yanking the Obama adminis-tration rule designed to prevent such wage theft, Labor Secretary Alex Acosta admitted.
And he won’t reinstate the ban on tip theft, either, he told lawmakers on March 6.
Instead, Acosta wants to replace the ban with a rule that, congressional Democrats and worker advocates say, would allow the tip theft.
The pro-tip theft rule is one of many anti-worker actions agencies imposed since Trump took over. But it’s drawn particular flak because DOL didn’t run the numbers on its impact, and because it would harm low-wage workers, especially working women. The pro-tip theft rule is also a key cause of the anti-worker National Restaurant Association.
Acosta said DOL did a “qualitative” survey on tip theft, but he won’t release it. While DOL didn’t run the numbers on the tip theft, the Economic Policy Institute, using federal data, did, in mid-January. It reported if Trump’s rule takes effect, the average tipped worker could lose a minimum of $1,000 yearly – and tipped workers are among those who can least afford such losses.
EPI’s analysis showed tipped workers would lose a minimum of $5.8 billion yearly due to employers pocketing the tips, and – in a worse-case scenario listed in one chart -- $13 billion. And working women would suffer 80 percent of the losses. Lawmakers cited both figures while questioning Acosta at the March 6 hearing on DOL’s budget.
"DOL has masked the fact this rule would be a windfall to restaurant owners and other employers — out of the pockets of tipped workers — by making it sound as if this rule is about tip pooling. Of course, once employers have full control of tips, one of the things they could do with those tips is distribute them to ‘back of the house’ workers like dishwashers and cooks.”
But Acosta’s replacement rule “does not require employers to distribute the tips, so employers would be no more likely to share tips with back-of-the-house workers than they would be to make any other choice about what to do with a business windfall,” EPI commented. They could use the tip money to “make capital improvements, to increase executive pay, or to line their own pockets.”
“Many employers pocket tips even now, when it is illegal for them to do so,” EPI noted. Research found 12 percent of tipped workers in in Chicago, Los Angeles, and New York saw their employers steal their tips. “When employers can legally pocket tips, many will.”
Acosta made the admission at House Appropriations subcommittee hearing on DOL’s proposed budget for the fiscal year that starts Oct. 1. Trump wants to cut the budget by 10 percent and Acosta also wants to put more money into “compliance assistance” – GOP-speak for aiding businesses while letting them avoid Labor Department inspections and enforcement.
The session turned testy when veteran Rep. Rosa DeLauro, D-Conn., challenged Acosta on the tips rule, which DOL, following Trump’s orders to yank federal rules, dumped.
“For the past year, working families have been under an all-out assault from this administration,” and yanking the tips rule is part of it, she said. So is the budget, she added, as it would “hollow out” the Labor Department.
Then she challenged Acosta on why the DOL didn’t have “an explicit ban” on bosses taking workers’ tips, and why top officials told staffers to hide even the “qualitative” survey.
Acosta filibustered. Given only five minutes per lawmaker to cover both lawmakers’ questions and his answers, the secretary used up time by constantly repeating her name, before answering. Sometimes he didn’t answer the question.
And when it came to a flat ban on bosses taking workers’ tips, Acosta, a former law school dean, retreated to legalisms. He said the 10th U.S. Circuit Court of Appeals ruled Obama’s DOL “exceeded its statutory authority” in instituting the tips rule in the first place.
Finally, DeLauro asked Acosta if he would reverse DOL’s decision to yank the anti-tip theft rule. Told to keep his answer short, Acosta replied “no.”
Rep. Katherine Clark, D-Mass., suggested a simple solution to the tip theft problem: Adding a sentence to the money bill for DOL to tell employers that “whether or not they take a tip credit, they (management) may not take workers’ tips.” She got bipartisan backing. “Let’s go,” DeLauro said. “I support it,” said Rep. Tom Cole, R-Okla., the subcommittee chair. Even Acosta said “absolutely.”
Tip theft was not the only topic panel Democrats raised with Acosta. Rep. Mark Pocan, D-Wis., a Painter, challenged the secretary on the declining number of job safety inspectors in what is an already understaffed Occupational Safety and Health Administration. Some 40 inspectors have left just since the start of this year and none have been replaced, said Pocan.
Acosta replied he issued a waiver to Trump’s federal worker hiring freeze to let OSHA seek more new inspectors. There are 65 applicants, he added, but he did not know if any have made it all the way through to working for OSHA.
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