It’s about to get way harder to make a living in the service industry. A newly proposed U.S. Department of Labor regulation will allow bar and restaurant owners to pool servers’ tips and literally, not figuratively, do whatever they want with the money.
If adopted the new rule, which was proposed on Wednesday, Dec. 6, will reverse an Obama-era regulation that treats tips as the property of the employees instead of the business. The rationale behind the proposal is that by redistributing the wealth from waiters and bartenders to cooks and dishwashers it will help make up the income shortfall between the front of house staff and back of house staff.
The problem is that the way the new regulation is written. If bar and restaurant owners continue to pay their servers $2.13 an hour then the servers get to keep their tips. If the servers are getting paid minimum wage — well, then the business owners get to hoover up all those singles and fins on the table. The new law won’t actually compel business owners to give the tips to anyone.
In essence, this proposed regulation relies on the trustworthiness of restaurant and bar owners. Official investigations and media reports have shown that some owners aren’t always the most trustworthy people when it comes to paying their employees.
Currently, about 10 percent of Texas’ food and drink workers report getting paid less than minimum wage — that’s assuming that they are getting their full paycheck. A 2016 investigation of 60 Austin restaurants by the U.S. Department of Labor found that 95 percent of them failed to pay workers all of their wages.
While the proposed regulation won’t force bar and restaurant owners to pay their employees — shady bar owners gonna shade — it will legalize some alleged ongoing behavior. Under state law, tip pools are perfectly legal in Texas, as long as the only people participating in the pool are tipped employees.
Some restaurant and bar owners have allegedly allowed non-tipped employees, including cleaning staff, to join in tip pools — which is against the law and has led to a score of lawsuits against local eateries.
Since the regulation is still in the proposal stage, the public has 30 days to comment and if it’s adopted years to gripe.