News

Did Labor Department squelch anti-tip-pooling data?

February 2, 2018

Restaurant industry workers and associated groups will show up at the U.S. Labor Department's doorstep Monday afternoon to fight back against what they allege is deception and obfuscation around the DOL's proposal to make servers' tips property of restaurant ownership. 
Restaurant Opportunities Center United - a national group that is fast-becoming the voice of restaurant labor - said Monday at 2 p.m. Eastern it will show up at DOL offices nationwide to deliver hundreds  of thousands of comments alleging a possible DOL cover-up of information that would work against passage of a proposed rule to make restaurant servers' tip the property of restaurant owners.

News of the alleged cover-up was released Thursday in a report in Bloomberg Law which said it obtained evidence from 
"current and former DOL sources, hailing from both political parties ... briefed by people involved in the rulemaking." Their identification was withheld the publication said "to prevent retaliation."

What they relayed was that Labor Department leadership not only tilted a negative analysis on the DOL's tip pooling proposal to  prevent the public from seeing that the report allegedly showed restaurant workers could lose "billions of dollars" in tips if the rule indeed becomes effective after a comment period is up on Feb. 5. 

According to the publication, the DOL employees allege that DOL leaders ordered staff to revise the method behind the data compilation to show less impact from the proposed rule because they didn't think owners would keep the gratuities, but would instead divvy them up between staff. 

The article said that the White House, however, ended up allowing DOL to publish the proposal in December without any of that data, setting off the clock on the comment period for the proposal that ends Feb. 5. 

That, in turn, means the public would be making their decisions on the rule without the complete information on its potential effects. 
The DOL responded to Bloomberg's report saying that it "works to provide the public accurate analysis based on informed assumptions." 
The proposed rule, if put into effect, would undo a 2011 rule that tips belong to the workers earning them. It was a FLSA revision which also covered situations restaurants and other employers added to tipped workers' earnings by paying at least the full minimum wage.

The National Restaurant Association, which largely speaks for restaurant ownership, has strongly supported the proposed rule.