It seems to me that one of the most insidious ways the federal government controls our lives may well be the “rules” put forth by the various departments. (“Insidious” is a really neat word that means, “characterized by slyness; crafty; operating in a not readily apparent manner; more dangerous than seems evident”) The way this rule stuff works is that the federal government has the authority to issue rules that have the force of law. These rules are written by bureaucrats in Washington to “flesh out” laws passed by Congress by issuing specific requirements of conduct, procedures, and such – which often, if not usually, reflect the current administration’s policy. Proposed rules are published with a specific time period for public comment before they are effective. These comments may be considered in the final rule, but not necessarily.
Okay, so what? Well, shortly before Christmas The Department of Labor proposed replacing a rule that had been effect since 2011. This proposed change would affect the way persons who are “servers” such as waiters, waitresses, and bartenders are paid. Understanding the basics of how these folks are paid requires starting with the Fair Labor Standards Act (FLSA), the federal law which governs things like minimum wage and overtime. There is a departure from the usual minimum wage rules for workers like servers and bartenders in that they get tips. For tipped employees, employers may take what is called a “tip credit,” meaning they can pay tipped employees less than the minimum wage as long as the tips will bring that wage up to the current minimum wage. (Note: The Ohio tipped employee minimum wage is now $4.15) In short, current federal policy recognizes tips as the property of the “servers” and allows tipped employees to keep them as part of their income, but the proposed rule would change that.
This proposal by the administration could require tips to be “pooled” with the distribution of this money being determined by the employer who may then share it among non-tipped hourly employees such as cooks and dishwashers. Not only would forcing servers to pool their tips likely result in a big hit in their earnings, but the proposed measure may well give employers a financial windfall. (Note: several nationally known companies have recently been charged with abuse of the federal rules regarding tipped employees so this is not an idle speculation.)
So how could this happen? Once again we must go to the law governing this situation. If employers pay tipped employees the “special” minimum wage of $4.15, they may take the “tip credit” of the difference between that and the “regular” minimum wage (now $8.15 an hour in Ohio) thus reducing their payrolls by the $4.00 an hour difference. The tips, however, belong to the employee. Now here comes the insidious part of the new rule.
If employers decide to follow the new rule and don’t take the “tip credit” by paying no less than minimum wage to all their employees including the “servers”, then tips are no longer considered the property of the employee; they become property of the employer. Employers may, but are not required to, allocate the tips between the tipped and non-tipped employees, but may also keep some or all for themselves as additional income. How about them apples? Sly? Crafty? “Operating in a not readily apparent manner?” You betcha.
An advocate for this proposal explains the change this way: “Possibly the most important thought is that we are eliminating wage disparity between different classes of employees. We give everyone a share by making tips belong to all restaurant employees. The end result under the new regulations is that we are all in this together providing excellent food and service.” Horse manure!
There is always a “wage disparity” between different classes of employees in any business and it not the responsibility of the employees to remedy this. Nope, this is a sneaky effort to grab the estimated annual $5.1 billion ($5,100,000,000) in tips from the “servers” and give it to employers.
By the way, pizza delivery drivers are also in this same general category of “tipped” employees, get paid the reduced minimum wage, and thus depend on tips as the primary source of their income. Wanna bet the pizza companies will go after their tips under this new rule?
Yep, this administration sure is “business friendly”, but in this case it’s at the expense of the employees and that’s just plain wrong. At least that’s how it seems to me.
Bill Taylor, a Greene County Daily columnist and area resident, may be contacted at email@example.com.