The Department of Labor Proposed a Rollback of the Tip-Pooling Rule


Posted by: Chris

In 2011, the Department of Labor enacted a rule that allowed tipped employees to keep their tips instead of being forced to give a portion of them to other non-tipped workers. Since tipped workers are paid lower wages than non-tipped workers, this rule was established to ensure tipped workers were being compensated fairly for their work. But, the Department of Labor has now proposed a rollback of the tip-pooling rule.

Businesses in the restaurant industry support the rollback of the Obama-era rule. These supporters believe that the ban on tip-pooling has led to servers and bartenders making far more money than employees who work behind the scenes in the kitchen. Instead of raising the kitchen workers’ wages to close the compensation gap, businesses want to be able to pool the servers’ tips and divide them among all of their employees.

However, not everyone is on board with the idea of rolling back the tip-pooling rule. Critics argue that the Department of Labor should not allow employers to collect tips and distribute them to other workers because this violates current wage theft laws. Because the proposal gives employers the freedom to distribute tips as they see fit, many critics also think employers will end up giving salaried managers or themselves a portion of the servers’ tips. Giving employers control would also mean the tips would no longer be considered the property of the worker who earned them, which is how they have been viewed since 1974.

Some critics also worry about how this will affect female employees in the service industry that are already vulnerable to harassment and discrimination. By giving their employer control over their tips, these women could be forced to tolerate inappropriate and illegal behavior in order to get the tips they have rightfully earned.

Even though the rollback proposal was not introduced until December, the Department of Labor stopped enforcing the tip-pooling ban much earlier in the year. If the ban is lifted, it’s possible that the Department of Labor will face lawsuits filed by workers’ rights groups that support the rule. But for now, it’s important for workers in the service industry to understand that the Obama-era ban on tip-pooling is still in effect.

Every worker has a right to be compensated for the work they do. If you are not being compensated fairly, seek legal representation from an experienced labor law attorney. The attorneys at Armstrong & Vaught, P.L.C. will guide you through the process of recovering the compensation that you deserve. Call our office at 918-582-2500, toll free at (800) 722-8880, or contact us online for a free consultation with an experienced attorney.