Protecting Workers’ Tips – A Win for Workers!
Attorney General Josh Shapiro led a coalition of 17 Attorneys General in opposing a Trump Administration plan to eliminate protections for tipped workers that would have allowed employers to steal workers’ tips – and, workers won! Congress included language prohibiting employers from taking workers’ tips in the Consolidated Appropriations Act of 2018.
Why It Matters
A rule legally issued in 2011 by the U.S. Department of Labor clarified that gratuities are the sole property of employees. Under the Trump Administration’s proposed rule change, employers would have been allowed to collect tips earned by employees who were paid the federal minimum wage of $7.25 per hour.
“Customers expect the tips they leave for their waiters, waitresses, bartenders and other service workers to go to those employees, not their employers,” Attorney General Shapiro said. “These employees depend on tips to supplement their income, feed their families and pay their bills. Allowing employers to take employees’ tips is unfair and misguided and I filed formal comments . . . with the Trump Administration opposing it.”
According to the Economic Policy Institute, the proposed rule change could have resulted in employers annually taking up to $5.8 billion of workers’ earned tips. The Department of Labor, which spearheaded the rule change, reportedly decided to shelve an economic analysis that highlighted the billions in gratuity earnings that workers could lose.
Under the Fair Labor Standards Act (FLSA), employers are required to pay their employees the federal minimum wage. Employers can meet this requirement either by paying employees the full federal minimum wage – currently $7.25 per hour – or by paying a lower cash wage, no less than $2.13 per hour under federal law and $2.83 per hour under Pennsylvania law, and making up the difference with the tips that employees earn. The latter practice is known as a “tip credit.” The Trump Administration’s proposed rescission of the 2011 rule would have allowed employers that pay employees the federal minimum wage to claim the employees’ tips for any purpose.
Attorney General Shapiro held press conferences where he stood in support of waitresses, waiters, bartenders and other service industry workers across the Commonwealth. At a Philadelphia diner and Pittsburgh bar/restaurant, he listened to workers’ concerns and pledged to protect their hard-earned wages. Workers won, thanks in large part to the efforts of Attorney General Shapiro, when Congress adopted provisions protecting workers’ tips in the omnibus budget bill, signed into law on March 23, 2018.
Tipped workers and organizations standing in support of tipped workers continue to fight for better working conditions, the end to unlawful wage and hour practices, and a higher minimum wage.
how you can get involved
If you wish to advocate for better working conditions for tipped workers, please see the Resources link for contact information for U.S. Secretary of Labor Alexander Acosta, Senators Bob Casey and Pat Toomey, and your Member of Congress. Likewise, if you or someone you know has been a victim of “tip stealing” or other wage theft, report the violation. See the Resources link for additional information and how to seek help.