WASHINGTON —Previously thwarted by congressional Democrats, even when they didn’t run the U.S. House, GOP Oval Office occupant Donald Trump’s Labor Department again plans to rob tipped workers of their wages—taking billions of dollars from the poorest employees and stuffing them into corporate pockets.
And his latest scheme adds yet another federal “final rule” to the growing pile of Trump anti-worker diktats Democratic President-Elect Joe Biden will have to try to overturn after he takes over the White House at noon, Jan. 20. And final rules are notoriously tough to reverse.
Trump’s Labor Department unveiled its rule on tipped workers’ wages on Thanksgiving, giving those workers sour grapes to go with their turkey, if they could afford turkey. On their wages, most can’t.
Tipped workers—including taxi drivers, restaurant servers, and airport porters—are among the lowest-paid workers in the U.S. They literally have to survive on what generous customers hand over. If the customer stiffs her, the worker loses.
That’s because tipped workers, except for those in states that have raised their minimum wages, have a federal minimum wage of $2.13 an hour. It hasn’t risen since early in the Reagan administration.
If the worker doesn’t earn enough in tips, her employer is supposed to make up the difference between that figure and the federal minimum wage, now $7.25, or a state’s minimum, whichever is higher.
But bosses have for years practiced wage theft against tipped workers, costing them billions of dollars, cumulatively, per year, according to Interfaith Worker Justice and the Restaurant Opportunities Center. The Economic Policy Institute puts the figure at $5.8 billion.
That’s a lot of money robbed from a lot of workers who earn so little to start with.
Now, at the behest of a corporate lobby that named itself the Center for Workplace Compliance, DOL wants to make it easier for bosses to keep paying workers the tipped wage, even when the bosses shift the workers to jobs that normally would get a regular wage.
Right now, DOL says bosses can pay a worker the tipped minimum all the time if the worker toils 80% of the time at a job where she depends on tips, and 20% of the time at a higher-paying job at the regular minimum wage or better.
Trump’s new rule, a boon to low-paying industries such as restaurants, would change that 80%-20% split to “reasonable” hours at jobs where the worker depends on tips. It doesn’t define “reasonable.” It also doesn’t say how many of those lowest-paid workers would suffer what is in essence a pay cut.
When Trump’s DOL first announced its plan, last year, 18 state attorneys general, led by Kwame Raoul,
D-Ill., Maura Healey, D-Mass., and Josh Shapiro, D-Pa., strongly objected, in a letter to Trump Labor Secretary Eugene Scalia. He didn’t listen.
“Under the proposed rule,” the AGs said then, “employers could schedule servers to start work well before the restaurant opens and to stay long after closing to prepare food, clean, or perform any number of other non-tipped duties, without any limit on how much nontipped work may be compensated at the lower {tipped] service rate.”
With no limits, enforcement against wage theft would be tough and it would be more likely to occur, wrote Deana Krokos in Harvard Law School’s On Labor blog. To make matters even worse, DOL didn’t calculate how much bosses would gain—and tipped workers would lose—by the Trump rewrite of the tipped workers rule.
So the Economic Policy Institute did, in its objections to Trump’s scheme. It calculated tipped workers would lose about $5.8 billion annually by toiling more hours covered by the lower tipped minimum wage than they do now—even if those hours were spent doing jobs that otherwise would pay the regular state or federal minimum.
Not only that, Krokos pointed out, but bosses would gain another way. If they can pay a server who’s acting in a higher-tier job the tipped minimum wage instead, they save money by not having to hire regular workers, even at the regular minimum wage.
The AGs haven’t decided, yet, if they’ll take Trump’s Labor Department to court. That could leave the mess up to Biden, and he’s been very clear on the issue. He wants to double the federal minimum wage to $15 an hour and bring every worker into it. Tipped workers, too.
“Let’s not just praise them, let’s pay them,” his Building Back Better plan declares. Workers would get “a decent wage, at least $15 per hour, and” the government would be “ending the tipped minimum wage and the sub-minimum wage for people with disabilities.”
Biden also advocates “strong benefits so they (workers) can live a middle-class life and provide opportunity for their kids,” and he wants to ensure their right to unionize.
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