Labor Secretary Acosta: DOL Did Not Survey Bosses' Grabbing Worker Tips

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

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 solons’ 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.  

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder