Demos Statement on DOL New Rules About Tips

New York, NY – On Monday, the U.S. Department of Labor released a proposed rule that would change regulations pertaining to the distribution of tips earned by restaurant workers. Demos’ Associate Director of Policy and Research Amy Traub released the following statement.

“The new rule proposed by the Department of Labor (DOL) would allow employers to legally pocket the tips earned by and meant for restaurant workers. This amounts to a backdoor legalization of wage theft.

“Under the proposed rules, employers, including major restaurant chains, will now have a means to keep the tips earned by frontline workers. Considering that wage theft is already commonplace in industries like retail and restaurants, there is every reason to believe that many employers will keep their workers’ earnings once it’s legal to do so.

“How much is this new rule likely to cost restaurant workers? No one knows. The DOL has failed to release an estimate of the cost, although such public information is required by law.

“Once again, the Trump administration is taking money from hard-working people and gifting it to corporations and the wealthy. And once again, they are trying to do so under cover of darkness, with no public information about the law’s costs to workers or the bonanza it presents to restaurant owners and chains.”

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