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to Section One | to Arts & Entertainment
posted Friday, January 19, 2018 - Volume 46 Issue 03
Work in the hospitality or food service industries? Read this story!
Section One
ALL STORIES
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Work in the hospitality or food service industries? Read this story!

The Trump administration wants to give your tips to your boss

by Mike Andrew - SGN Staff Writer

Food servers, bartenders, and hotel staff could lose more than half their income if a new rule proposed by the Trump Labor Department goes into effect.

The Trump administration, together with the National Restaurant Association - a trade group representing employers - is pushing a new federal rule to make tips the property of restaurant owners, rather than workers.

According to one study by the Economic Policy Institute, 'employers would pocket $6.1 billion of workers' tips' under the new rule.

Restaurant Opportunities Centers United (ROC), an organization that advocates for higher wages and better working conditions for restaurant workers, is urging all tipped workers to share their stories and opposition to the proposed rule at https://actionnetwork.org/letters/add-your-name-to-tell-department-of-labor-we-wont-let-you-take-workers-tips.

Local ROC organizers can be contacted via their Facebook page: https://www.facebook.com/ROCSeattle.

The Trump rule would overturn decades of federal and state laws and precedents safeguarding tips as the property of the workers who earn them.

The Fair Labor Standards Act (FLSA) was amended in 1974 to clarify that tips are to be retained by the employee, except when a valid tip-pooling arrangement is in place. In 2011, Pres. Obama's Labor Department reinforced the FLSA and over 40 years of custom and practice by federal and state agencies, affirming that tips are always the property of the employee.

Tipped restaurant workers already have the lowest federal minimum wage in the country, at just $2.13. If it is adopted, the new Trump regulation would force a vulnerable workforce further into economic instability.

Even in progressive jurisdictions like Seattle, where the locally mandated minimum wage is much higher, workers in the hospitality and food service industries still rely on tips for a substantial part of their total income.

ROC and the National Employment Law Project (NELP) analyzed the most recent public data available on wages for two commonly tipped occupations - waiters and bartenders - to determine just how much these restaurant workers depend on earnings from tips.

The Census Bureau's Current Population Survey (CPS) asks respondents to report their hourly wage, their usual hours, and their weekly earnings. From these data, ROC and NELP estimated the share of total earnings that come from tips.

They found that servers and bartenders have annual median earnings of $19,990 and $20,800, respectively.

But waiters and bartenders earn more in tips than they do from what employers pay them as an hourly base wage. The median share of hourly earnings that come from tips account for 58.5% of wait staff earnings and 54% of bartender earnings.

On a monthly basis, tips add up. The median monthly tip earnings for wait staff and bartenders are $867, or $10,404 per year, suggesting that many of these workers depend on their tip earnings to pay for essential expenses such as rent and utilities.

Even with tips, workers in these occupations earn very little on an hourly and annual basis. A recent Economic Policy Institute and University of California, Berkeley study examining CPS data found that median hourly earnings for waiters and bartenders are a meager $10.11 per hour, including tips. And this average includes data from high-wage cities like Seattle and SeaTac.

Workers of color make even less. Black workers in these occupations have a median hourly wage of $9.62, including tips, and Latino workers earn $9.93, suggesting that taking gratuities away from tipped workers will disproportionately impact workers of color and their families.

According to ROC, Washington state laws - like I-1433, passed in 2016 - may offer some protection to local workers, but '12 million workers in the US will be impacted by this in one way or another, and if the federal law is changed, it just incentivizes local interests, the Restaurant and Hospitality Association, for example, to lobby for statewide 'reform.'

'I think the tip language in 1433 is an excellent example of how individuals and organizations advocating for worker rights won language in 2016 through a people's initiative that is now critical to protecting us from national shifts over a year later,' ROC organizer Elena Perez told the SGN.

'We never know how federal laws and rules will change, especially in these times, but we have been successful in laying the groundwork to protect worker standards here, and we must continue to do so now and in the future!'

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