breaking news

Richmond school shooting: Suspect in attack identified

Employers may be able to keep workers’ tips under proposed labor rule


The five Democrats in the state’s congressional delegation are irate about a proposed Department of Labor rule that they say could allow employers to steal employees’ tips.

The outcry centers on the Trump Administration’s December 2017 decision to undo a 2011 rule that codified the idea that workers’ tips were their own.

The Trump Administration says the rules — aimed at restaurants that pay minimum wage — aren’t designed to allow managers to pocket their employees’ tips; but instead are aimed at allowing — but not requiring — “back–of–house” such as cooks or those who bus tables, to also receive a fair share of tips.

RELATED: Senate protests tip rule, says it’s ‘stealing’

“Both front–of–house and back–of–house employees contribute to the overall customer experience — yet the current rule bars sharing any tips with back-of-house employees in establishments that pay the minimum wage, contributing to wage disparities among employees,” said a Department of Labor spokesperson.

The Labor spokesperson disputed the notion that the rule will result in employers pocketing employee tips.

“Employers who keep their employees’ tips will be unlikely to retain the employees they need to serve customers,” the spokesperson said. “Moreover, taking tips inherently undermines the incentive system that rewards employees for performing excellent customer service, as well as the incentive to maximize the number of customers served… The idea that this proposal is about employers keeping tips defies common sense.”

But that explanation has not satisfied Democrats, who say it could result in employers pocketing billions of dollars from workers. A study by the left-leaning Economic Policy Institute found that the rule would cost tipped U.S. workers $5.8 billion a year, including $224 million for tipped workers in Ohio. That study found that an estimated 16.1 percent of all tips would be pocketed by employer. Tipped workers nationally earn a total of $36.4 billion annually.

Ohio currently can pay workers $4.15 an hour if they earn tips, but employees are permitted to keep all of the tips they earn. According to Policy Matters Ohio, employers are required to pay non-tipped workers at least $8.30 an hour - the Ohio minimum wage. Under Ohio’s law, employers are required to provide tipped workers with $8.30 an hour if they do not get enough in tips to make the minimum wage.

Michael Shields, a researcher for the left-leaning Policy Matters Ohio, said while it’s possible employers may share some tips with back–of–house employees, it’d be likely they’d use those tips to offset wages rather than increase them. That’s because there simply isn’t enough demand for back–of–house workers to require such workers be paid more, he said.

He said the proposal contains no requirement that business owners who confiscate tips distribute them among workers at all, they say.

“They call it the ‘tip–sharing rule,’ but we’re calling it a ‘tip–theft rule,’ because it allows employers to seize employees’ tips,” he said.

On Thursday, Sen. Sherrod Brown signed onto a letter to Secretary of Labor Alexander Acosta, that criticized the rule, saying it “would take money out of the pockets of low-wage workers.”

They cited news reports that Labor disregarded studies showing up the impact on workers, saying that Labor “covered up” reports indicating how the rule would hurt workers. The letter was signed by 22 other Democrats and Sen. Bernie Sanders, I-Vermont.

Separately, Ohio’s four Democratic House members — Reps. Joyce Beatty of Jefferson Township, Marcy Kaptur of Toledo, Tim Ryan of Niles and Marcia Fudge of Cleveland — issued a joint statement saying they were “extremely concerned” about reports that the Department hid studies critical of the rule.

“The way the rule is currently worded does nothing to protect the hard-earned pay from workers across Ohio and our Nation, in fact, it takes us backward,” they said. “The U.S. government, especially the Department of Labor, should stand on the side of our workers, not help greedy companies reach into their pockets for their hard-earned wages. We urge this Administration to scrap this rule and go back to the drawing board.”



Reader Comments


Next Up in Politics

Ohio lawmakers vote to ban late-term abortion procedure
Ohio lawmakers vote to ban late-term abortion procedure

The Ohio House on Thursday voted 62-27 to outlaw abortions performed by dilation and evacuation, a procedure commonly used to terminate pregnancies between 13 and 24 weeks gestation. Senators quickly agreed to House changes, setting up the bill to be delivered to Gov. John Kasich for consideration. In 2017, 3,441 D&E abortions were performed in Ohio...
Ohio Gov.-Elect Mike DeWine meets with President Donald Trump
Ohio Gov.-Elect Mike DeWine meets with President Donald Trump

Joining 12 other newly elected governors at the White House Thursday, Gov.-elect Mike DeWine said President Donald Trump “listened very carefully and was very engaging” as they talked about constructing new roads and bridges, combating drugs, and keeping Lake Erie clean. “There wasn’t much contention in there,” DeWine...
Ohio lawmakers vote to give themselves a pay raise
Ohio lawmakers vote to give themselves a pay raise

Ohio lawmakers, the governor and other elected leaders would be in line for a pay raise under a bill approved by the Ohio House on Thursday. The bill still needs to be signed by Gov. John Kasich to be come law but the governor expressed distaste for the pay raises, especially since they are coming during the lame duck session. On Thursday, the governor...
President Donald Trump issues challenge to John Kasich to run in 2020
President Donald Trump issues challenge to John Kasich to run in 2020

When asked if other Republicans such as Ohio Gov. John Kasich should challenge him in a primary in 2020, President Donald Trump on Thursday said, “I hope so.” During a Fox News interview with Harris Faulkner, the president was asked about a challenge from Kasich or retiring Arizona Sen. Jeff Flake. Kasich strategist John Weaver sent a short...
Ohio may set up database for violent offenders
Ohio may set up database for violent offenders

Ohio lawmakers have approved the creation of a statewide database of violent offenders under legislation named for a college student who disappeared while bicycling and was abducted and slain. The bill named for Sierah Joughin and known as “Sierah’s Law” was approved recently and will take effect if it is signed by Republican Gov...
More Stories