President Donald Trump is reversing a Barack Obama policy that banned employers from pooling their employee’s tips, directly affecting the restaurant industry.
Working in an industry that focuses on tips is difficult, with waitstaff and other workers counting on gratuities to end up in their pockets at the end of their shift. However, President Donald Trump may change that, intending to rescind a rule that allowed employers to redistribute the tips how they see fit.
This Is How It Will Effect Waitstaff
The business owner now owns the tips earned by the waitstaff. Under federal law, waitstaff makes a measly $2.13 an hour, but tips need to be used to raise that to the federal minimum wage, which is currently at $7.25 an hour. Under the Obama administration, the Labor Department tried to signal that the tips belong to the employees. Now that power has been shifted back to the restaurant owner, and it can potentially lead to the further increase in income inequality.
The Other NRA
The National Restaurant Association has a history of working closely with Republicans, ensuring that lobbyists bend to their every beck and call. While leaders in the restaurant industry are excited about this potential money grab, consumers may be concerned. Restaurant Opportunities Center United, an advocacy group for restaurant workers, warned that “consumers wouldn’t know that tips are going to the employer. The organization warns “if the employer pays the full minimum wage, then tips are allowed to be shared with the back of the house, that might be OK, but this regulation goes beyond that. It says it’s possible for employers to walk away with the tips and not give them to anybody.”
If you want to protest this new ruling, the public has 30 days to comment on it once it is published in the Federal Register.
Featured image via StaticFlickr.