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Press Release

AG Shapiro Stepping Up to Defend Rights of Tipped Workers by Challenging Proposed Labor Rule

December 10, 2019 | Topic: Peoples AG

HARRISBURG – Pennsylvania Attorney General Josh Shapiro, Illinois Attorney General Kwame Raoul, Massachusetts Attorney General Maura Healey, and a coalition of 19 Attorneys General submitted a comment letter to the Department of Labor opposing its proposed rescission of protections for tipped workers.

Under the Fair Labor Standards Act, employers are required to pay their employees the federal minimum wage. Pennsylvania 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 $2.83 per hour, and take a credit for the difference with the tips that employees earn. This is known as the “tip credit.”

For decades, tipped workers have been protected by what is known as the “80/20 Rule.” The rule ensures that any worker being paid $2.83 per hour—due to their employer utilizing the “tip credit”—spends at least 80 percent of their work time doing tipped work.

Under DOL’s proposal, the “80/20 Rule” would be eliminated and employers would be able to assign virtually unlimited amounts of non-tipped work – such as cleaning, cooking and other “back of the house” tasks – while still taking a tip credit and paying workers a lower wage.

“This proposed rule is another attempt by the Trump Administration to further erode wages for hundreds of thousands of Pennsylvania workers that rely on tips to make a living,” said Attorney General Josh Shapiro.  “My Office defeated similar attacks by the federal government last year, and we’re keeping up the fight to ensure workers get the wages they’ve earned, they deserve and they rely on to support themselves and their families.”

“Tips are the only way that most service workers can earn a living wage in Massachusetts,” said AG Healey. “This proposed change by USDOL would be harmful for tipped workers and their families by driving down their take home pay.”

“The Department of Labor’s attempt to eliminate the 80/20 rule would harm thousands of workers throughout Illinois,” Attorney General Raoul said. “Eliminating this rule would not only hurt employees who rely on tips as their income, but it would also put them at risk of wage theft and other unfair labor practices. I urge the Department of Labor to protect employees and reconsider this proposal.”

In their comment letter, Attorneys General Shapiro, Raoul, and Healey explain that the proposed rule would further erode the already low wages of tipped workers and leave them more vulnerable to wage theft.  The coalition further argues that the proposal is contrary to the purpose of the Fair Labor Standards Act – to protect workers – and that DOL did not abide by the requirements of the Administrative Procedure Act when it failed to examine the proposal’s impact on wages and increased reliance on social safety net programs.

Along with Pennsylvania, Illinois, and Massachusetts, today’s comment letter was filed by the Attorneys General of California, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.

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