Trump Administration Now Wants to Screw Over Restaurant Workers

The Trump administration is trying once again to tweak the rules that govern how tipped workers are paid. This time, their proposal would probably result in servers doing more non-tipped work and at a lower pay rate than previously required.

The Labor Department has rolled out a new proposed “tip rule” clarifying how employers can divvy up gratuities among their staffs. While most of the plan had been hashed out last year in a compromise with congressional Democrats, it includes a separate recommendation that has angered worker advocates: the elimination of the “80-20 rule.”

In most states, it is legal to pay servers and bartenders a sub-minimum wage, sometimes as low as $2.13 per hour, so long as tips get their hourly rate up to the regular minimum wage. Under the 80-20 rule, a tipped worker can be required to do nontipped work at the lower rate ― like folding napkins and filling up salt shakers ― so long as it doesn’t eat up more than 20% of the shift. If it does, then the worker would have to be paid the full minimum wage ― at least $7.25 per hour, depending on the state ― for that time.

The Labor Department, now headed by recent Trump appointee Secretary Eugene Scalia, wants to get rid of that explicit 20% time limit. Instead, the rule would simply require that the nontipped work be done “contemporaneously” or “within a reasonable time immediately before or after” the tipped work. So long as an employer met that vague criteria, there would be no precise cap on the nontipped work if the administration’s proposal becomes final.

“Unfortunately, today, DOL is proposing regulations that make it perfectly legal for employers to take advantage of tipped workers,” Judy Conti, with the left-leaning National Employment Law Project, said in a statement. “We are extremely disappointed, though not surprised, that DOL is again doing the bidding of corporate America rather than the workers it is supposed to protect.”

Servers and other tipped workers will lose out on the deal ― in fact, the Labor Department’s own analysis suggests that likelihood. In its proposal, the agency acknowledges workers will spend more time on lower-paying duties:

The removal of the twenty percent time limit may result in tipped workers such as wait staff and bartenders performing more of these non-tipped duties such as “cleaning and setting tables, toasting bread, making coffee, and occasionally washing dishes or glasses.” … Tipped workers might lose tipped income by spending more of their time performing duties where they are not earning tips, while still receiving cash wages of less than minimum wage.

What’s more, workers in the back of the house who are paid a full minimum wage could end up hurt by the rule as well, the agency notes. That’s because employers would have an incentive to shift nontipped work away from those employees to the tipped workers earning a lower pay rate:

Consequently, employment of workers currently performing these duties, such as dishwashers and cooks, may fall, possibly resulting in a transfer of employment-related producer surplus from those non-tipped workers to tipped workers who work longer hours.

Sen. Patty Murray, the ranking Democrat on the Senate Committee on Health, Education, Labor and Pensions, said that Scalia, who was confirmed late last month, “is already proving exactly what I feared: that he’ll really serve as a Secretary of Corporate Interests.”