February 08, 2018

Kaine, Colleagues Slam Trump Administration Decision Allowing Employers To Take Tips From Workers, Covering Up Negative Evidence

News reports show rules change would cost workers billions 

WASHINGTON, D.C. – U.S. Senator Tim Kaine joined Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee and 23 colleagues in a letter to Secretary of Labor Alexander Acosta slamming the Trump Administration’s decision to let employers take tips from their workers. The Senators criticized the Administration after news reports have shown the Department of Labor covered up evidence revealing the change in policy would result in employees losing billions of dollars. The Department previously claimed there was no evidence that the rule change would impact employee take home pay.

“We write to express our deep concern regarding reports that the Department of Labor (DOL) concealed evidence from the public showing that DOL’s proposed tip rule would result in employees losing billions of dollars in tips,” wrote the Senators. “DOL is forcing through a regulation that would take money out of the pockets of low-wage workers and, even worse, it covered up the potentially catastrophic impacts from workers and advocates. This is a stark example of how far the Trump Administration is willing to go to appease business interests at the expense of working families.”

In December 2017, the Trump Administration proposed rescinding Obama Administration rules that ban employers from taking workers’ tips, potentially allowing employers to keep these tips for themselves. In order to ensure the public understood the impacts of this rule change, Murray asked the Department for any analyses or data related to tips or this tip rule—the data the Department of Labor tried to manipulate, then concealed entirely from the public.

In addition to Kaine and Murray, the letter was signed by Senators Chuck Schumer (D-NY), Dianne Feinstein (D-CA), Ron Wyden (D-OR), Dick Durbin (D-IL), Jack Reed (D-RI), Bernie Sanders (I-VT), Ben Cardin (D-MD), Sherrod Brown (D-OH), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), Tammy Baldwin (D-WI), Chris Murphy (D-CT), Mazie Hirono (D-HI), Elizabeth Warren (D-MA), Ed Markey (D-MA), Cory Booker (D-NJ), Chris Van Hollen (D-MD), Tammy Duckworth (D-IL), Maggie Hassan (D-NH), and Tina Smith (D-MN).

The full text of the letter is below and the PDF can be found HERE.

February 6, 2018

The Honorable R. Alexander Acosta

Secretary of Labor

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

Dear Secretary Acosta:

            We write to express our deep concern regarding reports that the Department of Labor (DOL) concealed evidence from the public showing that DOL’s proposed tip rule would result in employees losing billions of dollars in tips. DOL is forcing through a regulation that would take money out of the pockets of low-wage workers and, even worse, it covered up the potentially catastrophic impacts from workers and advocates. This is a stark example of how far the Trump Administration is willing to go to appease business interests at the expense of working families.

            In December, DOL proposed a rule that would rescind portions of its tip regulations that protect tipped workers. These low-wage workers—two-thirds of whom are women—struggle to support themselves and their families, experiencing poverty rates twice as high as rates for all working people.[1] Workers rely on their tips as a major source of income, they work extremely hard to earn them, and they deserve to keep them. The existing tip regulations make clear that tips are the property of employees, ensuring that employers are not able to confiscate employees’ tips and use them as they please. These regulations are essential to ensuring that workers across the country who receive tips at their jobs earn a fair wage by being able to keep their tips.

            DOL provided the public with no quantitative economic analysis in its proposed rule, contrary to multiple Executive Orders on rulemaking procedures, stating that DOL “currently lacks data to quantify possible reallocation of tips[.]”[2] However, according to news reports, DOL did conduct this quantitative analysis and found the rule would result in workers losing billions of dollars if it is finalized. Instead of allowing the public to provide feedback on this impact on workers, DOL reportedly chose to bury the analysis and instead issue the proposed rule that stated that uncertainties were too great to perform an analysis. After the proposed rule was released, Senator Murray, as Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, specifically asked DOL if any such data existed or analysis had been conducted. DOL has yet to respond.

            Many of us already are on record expressing our deep concerns that DOL, which has as its mission “[t]o foster, promote, and develop the welfare of wage earners … of the United States,” would propose a rule that it was aware would cost workers billions of dollars each year.[3] However, the idea that officials at DOL—potentially including yourself—would take steps to mislead the public and deprive them of information about the impacts of the rule leads us to the unavoidable conclusion that you must act to withdraw this rule.

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[1] National Women’s Law Center, “Women and the Tipped Minimum Wage, State by State” (July 20, 2017), https://nwlc.org/resources/tipped-workers; National Women’s Law Center & Restaurant Opportunity Centers United, “Raise the Wage: Women Fare Better In States with Equal Treatment for Tipped Workers” (October 2016), https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2016/10/Tipped-Wage-10.17.pdf.content/uploads/2016/10/Tipped-Wage-10.17.pdf.

[2] U.S. DOL, “Tip Regulation Under the Fair Labor Standards Act (FLSA),” 82 FR 57396 (December 5, 2017).

[3] United States Department of Labor, “Our Mission,” https://www.dol.gov/opa/aboutdol/mission.htm (last accessed February 1, 2018).