While we were distracted, look what oozed in through the keyhole

On December 5, 2017, the Department of Labor under the guidance of the self-proclaimed populist President offered proposed regulations that would affect tipped employees. The 60 day comment period just expired, so unless the push back was convincing this proposal may become regulation. The proposal unwinds an Obama regulation which prohibits an employer from garnishing tips from workers who make at least the $7.25 minimum wage.

It should be noted that restaurant workers have a lesser minimum wage of only $2.13 which has been in place for twenty plus years. They can be paid an hourly wage this low, provided their tip income brings their total hourly pay to $7.25. As of May, 2017, the average combined wage and tip income for restaurant workers was $11.82 per hour.

In essence, the proposed regulation would allow an employer to garnish the extra tips above a total wage rate of $7.25. Now, the employer could be altruistic and reallocate this tip income to all workers, such as the cooks and buspeople (those that clean off the tables). This could also include the tipped worker who would receive a reallocated portion, but less than the direct tips garnished.

Yet, a very troubling part of the proposal is the employer could keep the tips and not reallocate them to workers. It is noted therein that the tips could be made for structural improvements or to reduce menu prices. Note, this is a low margin business, so it would not be a leap to see more than a few employers not reallocate all or any of the money. This is especially concerning within an industry where some managers exploit all and harass female workers (note read “Nickeled and Dimed in America” by Barbara Ehrenreich on working in minimum wage jobs that perpetuate poverty).

Per an article in The Washington Post (see link below), “‘There is no way to do a good face estimate and maintain the fiction that this rule isn’t terrible for workers,’ said Heidi Shierholz, who previously served as chief economist for the Labor Department, in a conference call on Thursday arranged by EPI.”

Many things concern me about this. If the employer were made to reallocate the garnished tips to other workers including the affected worker, then it would be more understandable as an employment term. A worker could then decide to work elsewhere if they felt they could make more there. It should be noted that in some cities that are phasing up to a $15.00 per hour minimum, some restaurants are going without any tipping, but that is understood beforehand and communicated to patrons.

The troubling part is the employer being able to choose to keep some or all of the money, provided the below market minimum wage is used. Help me understand how this helps those masses of people who voted for a man to make their lot in life better. Coming on the heels of other changes that have been made to favor Wall Street, such as the Tax Bill, this President does not look very much like a Main Street man.

What are your thoughts? Have you ever worked in a restaurant?


18 thoughts on “While we were distracted, look what oozed in through the keyhole

    • To your point, one of the best things Obama did was the Consumer Financial Protection Bureau. It has worked exceedingly well as it fines banks, credit card companies for aggressive and fraudulent marketing practices. Over 90% of the collected money goes to the screwed customers. Yet, Republicans hate it and want it eliminated. So, when it’s director left to pursue a career in politics, Mick Mulvaney took over and is hamstringing the agency. This hurts consumers and helps banks. And, most of those consumers are not well off. I wish this was not true, but followers of this President have little idea how little he helps them, outside of token measures. Keith

    • Rob, his followers have little idea at the damage he is doing. They listen only to him and he tells them everyone else is against him and lying. This example here would be harmful to so many people, yet it is largely uncovered. Keith

      • It is a problem Keith. Why can’t folks who know how to use a computer to hurl racial slurs learn how to use them to find fact based news? They have children whose futures are at stake. Or are they so crazy with hate they can’t think? I’m puzzled.

      • Rob, we are the United States of Entertainment, so we don’t pay attention to news. And, then we have people who pay attention only to news fed by more biased or spin-doctored. So, negative news items that should be more known about what this President is doing is truly unknown to too many. When I told a Republican friend that Trump is acting guilty, he asked me why I would say that? Keith

  1. I worked for a time while in high school in a restaurant, but it didn’t last long, as I am a klutz and I quickly learned that customers do not like having their dinner dumped in their laps. That said, I think this proposal, soon-to-be-regulation, is horrible! Servers in a restaurant work very hard to give good service to earn that extra tip money. I am a generous tipper, between 20-25% as a rule, assuming the service was friendly and efficient, and I am not doing it to give back to the restaurant owners so that they can increase their bottom line. This is just one more thing to increase the division between the 1% and the 99%. I am incensed!

    • Jill, you said it well. As I mentioned, these employees tend to be exploited from a scheduling standpoint, benefits standpoint and pay standpoint. And, too many are sexually harassed or assaulted. I think I included it in a comment to a post, that managers ask waitresses to show more cleavage and be flirtatious to get bigger orders and tips. Then, they get harassed by the customers. My wife quit a job at a fish camp where she kept getting pinched on her fanny. She said she hid in the kitchen. Keith

      • Jill, I should add that I worked in an old steak chain restaurant while in high school. I bussed tables, washed dishes, baked tons of potatoes and even hosted. It was tiring work and I would go home feeling greasy needing a shower. And, we were paid bare bones. Keith

      • That … asking staff to show more cleavage, sexual harassment, is so wrong … what the heck is happening? That is archaic behaviour on the part of management and I thought we had become more enlightened. I find this country, perhaps the world, to be a depressing place to live these days. We fight the good fight, but then wake up in the morning and find we have taken another step backward toward the dark ages.

      • Jill, I consulted with several retail and restaurant employers. A manager holds the cards on scheduling, so he (or she) can wield that power, especially in a small town where jobs are scarce. The cleavage request is not unusual and many of the waitresses complain of sexual harassment from the managers and patrons. The Employment Litigation risk in retail and restaurants exceeds other industries. Keith

  2. Dear Keith,
    I have a habit of tipping generously with the thought that I am helping the waitress/ water who treated me so well I want the tip to go to the intended recipient. This is not good news. It is one more nail towards proving that President Trump doesn’t give a hoot about the average Joe workers who voted for him.
    Hugs, Gronda

    • Gronda, I agree with your mindset on tipping and this proposed regulation. I will be sending a variation out tomorrow to others. Please feel free to route. Keith

  3. Pingback: While we were distracted, look what oozed in through the keyhole – by musingsofanoldfart | Filosofa's Word

  4. Hey Keith! I finally shared this post … been meaning to ever since I first saw it, but you know how that goes. Anyway, with the re-blog button gone, I did the best I could to ensure that readers will click the link and come here to read the entire post. Thanks for letting me “re-blog”!

      • We went out for a late lunch/early dinner on Saturday, and our favourite server happened to be working and we were lucky to be seated at one of his tables. I asked him if he had heard of this proposal. He had and of course was hoping it never sees the light of day, but said that if it does become reality, he will give this job up. He told us that he is working two jubs to try to support his family and he would rather work at MdDonald’s than at someplace where no matter how hard one works, one is held in place by an invisible limit. I sincerely hope that it doesn’t come about, for I cannot think of anything more unfair to those who must rely on the tips from a fickle public to live, and now to have those legally stolen!

      • Jill, I am glad he is aware of it. I wish this could become more widely known. This flies directly in the face of this populist image. Keith

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