Moneybox

Congress’s Big Spending Bill Contains Some Great News for Restaurant Workers

WASHINGTON, DC - JUNE 07:  Senate Veterans' Affairs Committe member Sen. Patty Murray (D-WA) questions Veterans Affairs Secretary David Shulkin during a hearing in the Russell Senate Office Building on Capitol Hill June 7, 2017 in Washington, DC. Shulkin testified about the VA Choice Care program and how best to change it to better serve veterans.  (Photo by Chip Somodevilla/Getty Images)
Patty Murray for the win.
Chip Somodevilla/Getty Images

America’s waiters and waitresses can rest a tiny bit easier Thursday: The giant spending bill making its way through Congress contains language designed to stop restaurant owners from using a controversial new regulation as an opportunity to steal their workers’ tips.

The provision, which HuffPost’s Dave Jamieson reported on earlier Thursday, is designed to head off problems that likely would have arisen thanks to a rule proposed by the Department of Labor in December. The change, widely condemned by labor groups, would once again let restaurants force their front-of-the-house staff to pool the tips they earn and share them with kitchen workers as long as they were paid the federal minimum wage of $7.25 an hour. (The Obama administration banned that practice by regulatory fiat in 2011.) Critics of the move argued that it would essentially legalize tip theft because, as written, the rule did not require mangers or owners to actually redistribute gratuities among their workers once they were pooled. Instead, they could just pocket the money. The left-wing Economic Policy Institute estimated that the loophole would have cost workers $5.8 billion in lost tips annually.

Thankfully, the $1.3 trillion appropriations bill Congress is in the process of rushing to President Trump’s desk would ban that sort of skimming. It states simply that, “An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips.” Simple as that.

It appears this addition to the bill was a bipartisan collaboration. Washington Sen. Patty Murray, a Democrat, said she crafted the tweak alongside Labor Secretary Alexander Acosta, whom she’d previously sparred with over the tip rule. As I wrote Wednesday, Acosta also decided to bury an in-house economic analysis by his department that suggested the regulation would cost workers billions a year. His decision to work with Democrats on a fix rather than continue ignoring the problem is one of the more heartening examples of functioning governance that I can recall in recent months.

As Jamieson notes, not all Democrats or labor advocates are entirely pleased with the new language, since it would still leave room for restaurant owners to force their waiters and bartenders to share tips with cooks and dishwashers. I think you can have a legitimate argument about whether that’s really such a bad thing. The basic case in favor of tip pooling is that front-of-the-house staff in restaurants often unfairly earn more than back-of-the-house staff (who tend to be minorities) because waiters and bartenders can rack up tips, while cooks cannot. Letting managers redistribute the nightly tip haul among all their workers could help alleviate that inequality.

The basic con case is that people who earn tips by dealing with the insane and often abusive behavior of customers should get to keep them, and that managers might actually use tip pooling as an excuse to cut the base pay for kitchen workers (they’d cut their cooks’ hourly wages, then replace the money with gratuities taken from their waitresses). This is a deep and fierce debate that gets into the heart of restaurant economics, and raises the question of whether or not tipping is even a reasonable business model anymore.

But at the very least, it seems servers won’t have to worry about having their owners outright pocket their pay.

Jordan Weissmann is Slate’s senior business and economics correspondent.