facebook pixal

Congress slips a tip safeguard into omnibus spending bill

The measure expressly prohibits employers from keeping tips when sharing gratuities with back-of-house staff.

Opponents of tip sharing have slipped a provision into Congress’ 2,232-page omnibus spending bill to prohibit restaurant owners and supervisors from skimming money from servers’ tip pools.

The amendment, which appears on page 2,025 of the document, is intended to close a loophole in the Department of Labor’s plan to permit the sharing of servers’ gratuities with kitchen staffers. The DOL proposed in December that the pooling and redistribution of tips be allowed as a way of closing the gap between front-of-house and back-of-house compensation levels. Servers often make several times what dishwashers and prep cooks earn, largely because of tips.

The sharing would only be permitted by restaurants that do not take a tip credit, or count gratuities as part of servers’ legally mandated pay.

The proposal drew an extraordinary level of protest because the language did not prohibit employers from keeping any or all of the money that would be collected for sharing. DOL was accused of burying a study that predicted $5.8 billion in tips would be redirected into restaurant owners’ and managers’ pockets.

More than 215,000 individuals filed comments on the DOL’s proposal, most blasting the measure as a way of permitting wage theft. The attorneys general of 12 states were among the critics.

The amount of feedback was extraordinary for a proposed government rule change. DOL doubled the commentary period to 60 days because of the volume.

The agency has not said whether it will push forward with its plan.  The spending-bill provision banning employers' participation in a pool could ease adoption of the proposed sharing rule change. 

The amendment was reportedly the result of a political collaboration by unlikely allies. Secretary Alexander Acosta recently explained publicly that the department did not have the mandate to prohibit employers from pocketing tips, since its mission is to regulate rather than legislate. With Acosta’s apparent blessing, longtime adversary Sen. Patty Murray (D-Wash.) slipped language into the foot-high budget bill that Congress hammered out this week to avert a government shutdown on Friday.

The provision would require employers who are caught stealing employees’ tips to refund the money and pay a fine of $1,000.

The bill was approved by the House on Thursday afternoon, rushed through the Senate in the middle of the nigh, and signed into law by President Trump on Friday morning to avert a shutdown of the federal government at midnight.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


More from our partners