House Democrats are pushing legislation to stop employers from being able to pocket a portion of workers’ tips.
Democratic Reps. Katherine ClarkKatherine Marlea ClarkBiden employs flurry of meetings to unite warring factions Pelosi, moderates inch closer to infrastructure, budget deal House Democrats return to advance Biden's agenda in face of crises MORE (Mass.) and Rosa DeLauroRosa DeLauroHouse sets up Senate shutdown showdown The Hill's 12:30 Report: Biden to announce increased measures for omicron Schumer warns of 'Republican anti-vaccine shutdown' MORE (Conn.) introduced the Tip Income Protection Act on Wednesday in response to a proposed rule from the Department of Labor (DOL) that will allow employers to pool the gratuities earned by employees who make the full minimum wage and split them with nontipped workers.
Opponents have argued there’s nothing in the regulation to stop employers from stealing tips for themselves.
Clark and DeLauro’s bill, however, would amend the Fair Labor Standards Act to make all tips, even those that are pooled, the property of the employee not the employer.
"Tipped workers — not their bosses — are entitled to their hard-earned dollars,” DeLauro said in a statement. "The biggest economic challenge of our time is that too many people are working in jobs that do not pay them enough to live on. Given that reality, it boggles my mind that the Trump administration would allow employers to pocket minimum wage workers' money, yet the recent DOL proposal would create that exact loophole.”
At a House subcommittee hearing Tuesday on the Labor Department budget, DeLauro pressed 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 on why the proposed rule doesn’t include a provision to prevent employers from stealing workers tips.
“It’s a legal issue,” Acosta said.
He said the 10th Circuit Court of Appeals made clear the agency lacks the statutory authority to say all tips are the property of the employee.
In June, the federal appeals court struck down a 2011 agency regulation designating tips the property of the employee regardless of whether the employer pays the full minimum wage or uses an employee’s tips as a credit against their minimum wage obligations.
“No one wants or believes that establishments should keep tips,” Acosta told lawmakers Tuesday. “In many ways this is a fundamental issue of law. The 10th Circuit has struck down the prior regulation that was promulgated. The 9th Circuit has upheld it over a vigorous dissent and this issue is now pending in the Supreme Court.”
Acosta instead recommended lawmakers amend the Fair Labor Standards Act to give DOL the authority to prohibit employers from keeping a portion of workers' tips.
Clark asked Acosta if he would support a law that makes tips belong exclusively to the workers who earn them.
“Absolutely," he said.