search btn

Photo By: 

Trump's Going After Your Tips

A new rule would allow tip pooling and cost workers over $200 million

Brian Young's picture
Nov 30, 2020

There may only be a handful of weeks left in Trump’s term, but his aides are making sure that his policies have a lasting impact. At the Department of Labor, they are rushing to finalize two new rules that go after tip-earning workers and allow government contractors to discriminate against LGBT workers.

Last week, the White House budget office began reviewing a final rule that would change the pay scale for tipped workers. Currently, a company can pay a tipped worker a lower minimum wage ($2.13 an hour) if the employee spends 80% of their time doing tipped wage duties, like waiting tables. However, under Trump’s proposal, businesses would be allowed to pool tips. This means that they could disperse the tips among not only the waitstaff but the back of the house as well. While this might sound great, what it really means is that the business can pay everyone working there just $2.13 an hour, much less than the federal minimum wage of $7.25 an hour or states’ minimum wages which can be as high at $15 an hour. According to NPR, the Labor Department estimates that Trump’s plan would transfer as much as $213.4 million a year in tips from waitstaff to kitchen workers, meaning that bosses can pay $213.4 million less to their employees. The new rule would also get rid of the 80% rule and allow employers to pay the tipped minimum wage as long as the side work like folding napkins is "contemporaneous with, or within a reasonable time immediately before or after" tipped work.

"We worry very much that this allows employers to take advantage without having any sort of guidance that they also need in order to ensure they're doing the right thing," said Judy Conti, director of Government Affairs with the National Employment Law Project (NELP).

Trump is also pushing a second rule that would allow government contractors to claim a religious exemption when making employment decisions. Last week the White House budget office completed its review of the final rule. The new rule would allow government contractors to claim that they couldn’t hire someone who was gay based on their religion. The rule would also expand the types of companies that are eligible for the exemption.

By using the official rules process, Trump is creating roadblocks to slow President-elect Joe Biden down when he moves to repeal them. Unlike an Executive Order, Biden’s Department of Labor would have to issue a new rule, open the process up to public comment, and go through the whole process all over again, a process that took Trump nearly two years. This means that Trump’s policies are likely to be felt for years to come after he leaves office.


Sign up for our e-Newsletter!