Tip pooling proposal runs into trouble

The U.S. Department of Labor has extended the time granted opponents and supporters of a proposed change in tip pooling rules to sound off on the adjustment, a sign the measure is drawing resistance.

The change, which would allow restaurants to pool tips and share the money with nontipped employees like back-of-house staffers, is strongly favored by the industry. Groups such as the National Restaurant Association have championed the measure as a way of closing the significant gap between the income of servers and kitchen employees.

Opponents contend that permitting the practice will lead to rampant abuse. The fear is that management and ownership of restaurants will dip into the pools themselves, contrary to the spirit of the rule change proposed by DOL. Some establishments have indeed argued that servers should channel some of their gratuities back to the operation to cover the processing fees for tips charged on credit cards. Before the form of sharing proposed by the rule change was outlawed in 2011, some places charged a small administrative fee for managing the pools.

Labor advocacy groups like Restaurant Opportunities Centers United say the new rules proposed by DOL would essentially give employers control of tips, with no safeguard against an establishment keeping at least some of the money.

At the union-like organization’s behest, actress and activist Jane Fonda has recorded a video blasting the tip pooling plan. “Restaurant servers are about to get totally screwed under a sneaky new rule,” Fonda says in the clip. “The Department of Labor has proposed a new rule that will let restaurant owners legally steal their workers’ tips.”

The spot ends with a number viewers can text to express their opposition to the proposed rule change.

ROC co-director Saru Jayaraman told The Hill that 33,000 comments had been filed through the texting number during the first three days it was live.

The organization says its research reveals that one in five restaurant servers have already had a portion of their tips stolen by their employers.

Among its assertions is that DOL purposely set the comment period on the proposed rule change for the holidays, when servers and consumers will be busier than normal and hence less likely to have time to submit their opinions.

“Restaurant Opportunities Center is wrong on this issue," Angelo Amador, executive director of the NRA-affiliated Restaurant Law Center, said in a prepared statement. "Confining tips to just servers creates a disparity between servers and those in the back-of-the-house washing dishes and preparing the meal. They’re all working towards the same goal of providing a great guest experience.”

The DOL has pushed the deadline for comments out by 30 days, to early February.


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