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 MurrayTech executives increased political donations amid lobbying push Schumer, Tim Scott lead as Senate fundraising pace heats up Sunday shows preview: As delta variant spreads, US leaders raise concerns 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 TrumpFormer New York state Senate candidate charged in riot Trump called acting attorney general almost daily to push election voter fraud claim: report GOP senator clashes with radio caller who wants identity of cop who shot Babbitt 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 ScottBiden celebrates anniversary of Americans with Disabilities Act Now is the time to end the subminimum wage for people with disabilities House passes bill to ease standards for age discrimination cases MORE (D-Va.) and Reps. Keith EllisonKeith EllisonAttorneys general looking into online fundraising practices Minnesota AG asks judge to acknowledge trauma of children who witnessed Floyd's death Sunday shows preview: Moderates, Biden reach deal on infrastructure; Chauvin sentenced to 22.5 years in prison MORE (D-Minn.), Mark TakanoMark Allan TakanoVA's decision on transgender veterans is a step in the right direction House sends anti-Asian hate bill to Biden's desk US tensions with China risk fueling anti-Asian harassment at home MORE (D-Calif.) and Suzanne BonamiciSuzanne Marie BonamiciEnd the practice of hitting children in public schools How we can end the tragedy of elder abuse, neglect, and exploitation Shakespeare gets a congressional hearing in this year's 'Will on the Hill' MORE (D-Ore.) said in a joint statement.