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Spending bill prevents employers from pocketing tips under tip-pooling rule

Spending bill prevents employers from pocketing tips under tip-pooling rule
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The $1.3 trillion spending deal released late Wednesday night includes language to prevent employers from being able to steal workers’ tips under the Labor Department’s controversial tip-pooling rule.

Sen. Patty MurrayPatricia (Patty) Lynn MurraySchumer 'exploring' passing immigration unilaterally if talks unravel Senate Democrats push Biden over raising refugee cap House passes bill to combat gender pay gap MORE (D-Wash.) reached the deal with Labor Secretary Alexander AcostaAlex Alexander AcostaOn The Money: Trump slams relief bill, calls on Congress to increase stimulus money | Biden faces new critical deadlines after relief package | Labor rule allows restaurants to require broader tip pooling Labor rule allows restaurants to require broader tip pooling Federal litigator files complaint alleging Labor secretary abused his authority MORE to add a rider in the bill that amends the Fair Labor Standards Act to prevent employers, managers or supervisors from pocketing workers’ tips regardless of whether they earn gratuities on top of a full minimum wage.

The language gives workers the right to sue to recover any stolen tips with added damages and gives the secretary of Labor the ability to impose civil penalties on employers who violate the law.

“When President TrumpDonald TrumpVeteran accused in alleged border wall scheme faces new charges Arizona Republicans to brush off DOJ concern about election audit FEC drops investigation into Trump hush money payments MORE proposed a rule that would have allowed corporations to pocket workers’ tips for themselves, workers across the country organized and made their voices heard,” Murray said in a statement.

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“Those workers sent the Trump Administration a message — and I’m pleased that Secretary Acosta listened, reversed course, and worked with me on legislation to make sure that big businesses can’t steal their workers’ tips. For the millions of workers who rely on their tips to pay their bills and support their families, most of whom are women, this change comes as a sigh of relief,” she said.

Acosta has been under fire since the rule was first proposed in December to allow employers to pool the tips of workers who make the full minimum wage and split them with nontipped workers.

The rule does not apply to workers who make less than a full minimum wage and use tips to supplement their pay, but labor groups said there was nothing in the regulation to stop employers from pocketing a portion of employees’ tips.

A Bloomberg Law report later revealed agency officials had withheld an unfavorable report that showed workers stand to lose billions in gratuities if the rule is finalized.

Democrats, labor groups and 17 state attorneys general have since demanded Acosta withdraw the rule.

And in a second report Wednesday morning, Bloomberg Law reported that Acosta convinced Office of Management and Budget (OMB) Director Mick MulvaneyMick MulvaneyHeadhunters having hard time finding jobs for former Trump officials: report Trump holdovers are denying Social Security benefits to the hardest working Americans Mulvaney calls Trump's comments on Capitol riot 'manifestly false' MORE to overrule the nation’s regulatory czar to release the rule.

OMB fired back against that report Wednesday afternoon.

In a statement to The Hill, office spokesman Coalter Baker said OMB historically does not comment on the deliberative process, but is making an exception in this case.

"We will make an exception now, as the premise of this reporting is false: there is zero daylight between Director Mulvaney and [Office of Information and Regulatory Affairs] Administrator [Neomi] Rao on regulatory policy," he said. 

Top Democrats on the House Education and the Workforce Committee said Wednesday they will be requesting a hearing to examine the department's conduct and Acosta’s role in this controversy.

“This latest report from Bloomberg Law that Labor Secretary Acosta urged OMB Director Mick Mulvaney to exclude a legally required analysis only intensifies existing concerns about the integrity of the rulemaking process for its proposed rule to allow employers to keep and control how to redistribute workers' tips,” Committee ranking member Rep. Bobby ScottRobert (Bobby) Cortez ScottDemocrats target Trump methane rule with Congressional Review Act Senators eye rollback of Trump methane rule with Congressional Review Act To Build Back Better, Biden must invest in modern apprenticeship system MORE (D-Va.) and Reps. Keith EllisonKeith EllisonDerek Chauvin asks for new trial Minnesota AG says he 'felt a little bad' for Chauvin after guilty verdict Minnesota AG explains why Floyd's death not charged as hate crime MORE (D-Minn.), Mark TakanoMark Allan TakanoUS tensions with China risk fueling anti-Asian harassment at home Democrats rush to Biden's defense on border surge K Street navigates virtual inauguration week MORE (D-Calif.) and Suzanne BonamiciSuzanne Marie BonamiciDoes Biden have an ocean policy? Democrats renew push for George Floyd Justice in Policing Act The ocean can no longer be a climate victim MORE (D-Ore.) said in a joint statement.