Trump rolling back Obama rule on pooling restaurant tips

Trump rolling back Obama rule on pooling restaurant tips
© Camille Fine

The Trump administration is rolling back an Obama-era rule that bans employers from pooling workers’ tips.

The Labor Department announced plans Monday to issue a proposed rule to change the Fair Labor Standards Act regulation and allow employers to pool the tips of workers who make full minimum wage and share them with non-tipped workers. 

The National Restaurant Association has been fighting hard for the rule change to eliminate what it has said is a pay disparity between servers in the front of the house and staff in the kitchen.

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“These 'back of the house’ employees contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers,” the Labor Department said in its news release.

The agency said the proposed rule would not affect employees who make less than the minimum wage and earn tips to supplement their pay, also known as tip credit.

When the Labor Department first signaled in the semi-annual regulatory agenda that it was changing the rule, worker advocates argued it could allow employers to do whatever they wanted with the tips — including taking a cut themselves.

The public will have 30 days to comment on the proposed rule once its published in the Federal Register.