US: Workers to ‘lose $5.8 billion in tips’ under new employment regulations
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The US Department of Labor (DOL) has proposed a rule change which would allow employers to pocket their employees’ tips if they are being paid more than minimum wage.
At present, long-standing tip regulations under the Fair Labor Standards Act (FLSA) prohibit employers from taking tips.
A consultation on the proposed change was due to end earlier this month, but has been extended until February 2018.
The Economic Policy Institute (EPI) estimates that the new rules will cost workers $5.8 billion in tips every year, of which nearly 80 per cent ($4.6 billion) would be taken from women in tipped jobs.
The EPI said employers “would be no more likely to share tips with back-of-the-house workers than they would be to make any other choice about what to do with a business windfall, including using the money to make capital improvements to their establishments, to increase executive pay, or to line their own pockets”.
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