Congress Introduces Legislation to Ensure Restaurants Can’t Take Servers’ Tip Money
Restaurant owners could face penalties if they don’t comply.
The key tenet of tipping is that it shows appreciation for a job well done. And though the idea that tips are practically mandatory in modern American restaurant culture somewhat undermines that idea, it’s certainly not as defeating as when those tips are taken away from the people for which they’re intended. But now, for the first time, protecting tips from being put in owners’ pockets could become law, thanks to a new provision included in the spending bill that was passed by the U.S. House of Representatives earlier today.
Next, the Senate will need to pass the bill—and President Donald Trump must sign it—before Friday to avoid a government shut down.
In recent months, the Trump administration had thrown its support behind the idea of tip-pooling, but last night, a deal was reportedly struck between Sen. Patty Murray (D-Wash.) and Labor Secretary Alexander Acosta. Now, about 2,025 pages into the massive 2,232-page document, you’ll come across a section on “tipped employees” that stipulates “an employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” Penalties—including having to repay the tips—are included.
“Today represents a historic victory for restaurant workers,” Saru Jayaraman, co-founder and president of Restaurant Opportunities Centers (ROC) United, said in a statement. “The National Restaurant Association wanted to steal workers’ tips, but the workers said no—and they won. The fact that hundreds of thousands of workers stood up and said no to employers taking their tips, and that Congressional leadership listened and acted, is a testament to the power of workers standing up together.”
An Obama-era regulation had essentially banned tip-pooling, but in December, the Department of Labor said it was considering allowing the practice, suggesting it could help close the pay gap between servers and back-of-the-house workers. However, rolling back the rules would also mean that employers could potentially keep tips for themselves or give them out to management. In a statement, Murray also suggested that the voice of tipped workers was the difference maker. “When President Trump proposed a rule that would have allowed corporations to pocket workers’ tips for themselves, workers across the country organized and made their voices heard,” he said.