DOL Did Not Survey Bosses About Grabbing Worker Tips

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

The Trump administration Labor Department did not survey the “quantitative” impact of letting bosses grab workers’ tips before yanking the Obama adminis-tration rule designed to prevent such wage theft, Labor Secretary Alex Acosta admitted.

And he won’t reinstate the ban on tip theft, either, he told lawmakers on March 6.

Instead, Acosta wants to replace the ban with a rule that, congressional Democrats and worker advocates say, would allow the tip theft.

The pro-tip theft rule is one of many anti-worker actions agencies imposed since Trump took over. But it’s drawn particular flak because DOL didn’t run the numbers on its impact, and because it would harm low-wage workers, especially working women. The pro-tip theft rule is also a key cause of the anti-worker National Restaurant Association.

Acosta said DOL did a “qualitative” survey on tip theft, but he won’t release it. While DOL didn’t run the numbers on the tip theft, the Economic Policy Institute, using federal data, did, in mid-January. It reported if Trump’s rule takes effect, the average tipped worker could lose a minimum of $1,000 yearly – and tipped workers are among those who can least afford such losses.

EPI’s analysis showed tipped workers would lose a minimum of $5.8 billion yearly due to employers pocketing the tips, and – in a worse-case scenario listed in one chart -- $13 billion. And working women would suffer 80 percent of the losses. Lawmakers cited both figures while questioning Acosta at the March 6 hearing on DOL’s budget.

"DOL has masked the fact this rule would be a windfall to restaurant owners and other employers — out of the pockets of tipped workers — by making it sound as if this rule is about tip pooling. Of course, once employers have full control of tips, one of the things they could do with those tips is distribute them to ‘back of the house’ workers like dishwashers and cooks.”

But Acosta’s replacement rule “does not require employers to distribute the tips, so employers would be no more likely to share tips with back-of-the-house workers than they would be to make any other choice about what to do with a business windfall,” EPI commented. They could use the tip money to “make capital improvements, to increase executive pay, or to line their own pockets.”


“Many employers pocket tips even now, when it is illegal for them to do so,” EPI noted. Research found 12 percent of tipped workers in in Chicago, Los Angeles, and New York saw their employers steal their tips. “When employers can legally pocket tips, many will.”

Acosta made the admission at House Appropriations subcommittee hearing on DOL’s proposed budget for the fiscal year that starts Oct. 1. Trump wants to cut the budget by 10 percent and Acosta also wants to put more money into “compliance assistance” – GOP-speak for aiding businesses while letting them avoid Labor Department inspections and enforcement.

The session turned testy when veteran Rep. Rosa DeLauro, D-Conn., challenged Acosta on the tips rule, which DOL, following Trump’s orders to yank federal rules, dumped.

“For the past year, working families have been under an all-out assault from this administration,” and yanking the tips rule is part of it, she said. So is the budget, she added, as it would “hollow out” the Labor Department.

Then she challenged Acosta on why the DOL didn’t have “an explicit ban” on bosses taking workers’ tips, and why top officials told staffers to hide even the “qualitative” survey.

Acosta filibustered. Given only five minutes per lawmaker to cover both lawmakers’ questions and his answers, the secretary used up time by constantly repeating her name, before answering. Sometimes he didn’t answer the question.

And when it came to a flat ban on bosses taking workers’ tips, Acosta, a former law school dean, retreated to legalisms. He said the 10th U.S. Circuit Court of Appeals ruled Obama’s DOL “exceeded its statutory authority” in instituting the tips rule in the first place.

Finally, DeLauro asked Acosta if he would reverse DOL’s decision to yank the anti-tip theft rule. Told to keep his answer short, Acosta replied “no.”

Rep. Katherine Clark, D-Mass., suggested a simple solution to the tip theft problem: Adding a sentence to the money bill for DOL to tell employers that “whether or not they take a tip credit, they (management) may not take workers’ tips.”  She got bipartisan backing. “Let’s go,” DeLauro said. “I support it,” said Rep. Tom Cole, R-Okla., the subcommittee chair. Even Acosta said “absolutely.”

Tip theft was not the only topic panel Democrats raised with Acosta. Rep. Mark Pocan, D-Wis., a Painter, challenged the secretary on the declining number of job safety inspectors in what is an already understaffed Occupational Safety and Health Administration. Some 40 inspectors have left just since the start of this year and none have been replaced, said Pocan.

Acosta replied he issued a waiver to Trump’s federal worker hiring freeze to let OSHA seek more new inspectors. There are 65 applicants, he added, but he did not know if any have made it all the way through to working for OSHA.     




Posted In: Allied Approaches, From Press Associates

Union Matters

Powering America

From the USW

From tumbledown bridges to decrepit roads and failing water systems, crumbling infrastructure undermines America’s safety and prosperity. In coming weeks, Union Matters will delve into this neglect and the urgent need for a rebuilding campaign that creates jobs, fuels economic growth and revitalizes communities.

Fierce thunderstorms, heavy snows and unusually powerful hurricanes ravaged America’s fragile power grid and plunged millions into darkness this year.

And even as these natural disasters wreaked havoc across the country, COVID-19 stay-at-home orders sparked a surge in residential electrical demand, placing new stress on a failing system.

A long-overdue overhaul of the nation’s electrical infrastructure would not only ensure America continues functioning during a crisis but help to reinvigorate the pandemic-shattered economy.

Built in the 1950s and 60s, most of America’s electricity transmission and distribution infrastructure lives on borrowed time. Engineers never designed it to withstand today’s increasingly frequent and catastrophic storms fueled by climate change, let alone the threats posed by hackers and terrorists.

To ensure a reliable power supply for homes, schools and businesses, America needs to invest in a more resilient, higher capacity grid.

That means either burying electrical lines or insulating above-ground wires and replacing wooden utility poles with structures made of steel or concrete. Other strategies include creating a battery-storage system to provide backup power, building coastal barriers to protect infrastructure against storm surge and further diversifying into wind and solar production.

Also, a shift toward more localized generation and distribution networks would limit the impact of any one power outage.

Making these upgrades with U.S.-made materials and labor will both stimulate the economy and protect national security. American steelworkers, tradespeople and manufacturing workers have the expertise to build a power grid strong enough to weather whatever storms come America’s way.

More ...

Stronger Together

Stronger Together