The Trump Administration Wants to Let Restaurant Owners Pocket Employees’ Tips. Here’s Why Queer People Should Care.

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January 29, 2018
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This post was co-authored by Lambda Legal Staff Attorney Sasha Buchert and Lambda Legal Senior Attorney Natalie Nardecchia.

For wait staff earning the federal minimum wage of $7.25 per hour, a proposed Trump administration regulation would make all of their tips the property of their employer – thus permitting the employer to legally pilfer them. This new regulation would reverse the longstanding practice of the Department of Labor and an Obama-era regulation that tips are property of the employee.

So, what does this mean, exactly? It means that when you go to a restaurant and leave a tip for your server, you’ll have no guarantee that the server will actually get to keep any of that gratuity. The employer controls those funds and has complete discretion.

The new regulation, viewed widely as a gift to the restaurant industry, could lead to employers legally taking an estimated $5.8 billion worth of their workers’ tips as their own property.

This regulation is touted as giving employers “freedom to share” tips with “back of the house” workers such as dishwashers and cooks (who are certainly underpaid), but there is no requirement that employers actually share and distribute tips instead of lining their pockets or using them to pay general bills. And ultimately, employers should not be permitted to rob one employee of their wages and property in order to subsidize the cost of paying another employee a living wage.

Workers in the restaurant industry – particularly people of color, immigrants, young people and women – are already vulnerable to rampant wage theft, along with discrimination and harassment. LGBTQ restaurant workers also often face their own brand of discrimination and harassment as well. This can manifest in pressure to conform to gender stereotypes or conceal their identity in order to obtain employment, earn tips and avoid retaliation. LGBTQ restaurant workers’ complaints are also often not taken seriously, despite the fact that they face high rates of sexual harassment on the job.

Transgender restaurant workers are “nearly three times as likely to report harassing comments about their sexual orientation or gender identity from managers than their cisgender coworkers,” and “two and a half times more likely to report harassing comments about their sexual orientation or gender identity from customers than their cisgender coworkers.” Transgender workers are also often given the wrong uniform, the wrong nametag and prevented from using restrooms corresponding to their gender identity.

Tipped employees in particular experience even higher rates of sexual harassment than non-tipped occupations. And wait staff and bartenders typically rely upon tips for their livelihood. In fact, tips make up more of their earnings than what their employers pay, according to a recent study by NELP and ROC.

Restaurant servers suffer from three times the poverty rate as compared to the rest of the national workforce, and face variables outside their control that can determine if they pay their monthly bills or not. For instance, one lesbian waitress in Rockford, Illinois was denied a tip last summer because a customer would not “tip someone who doesn’t love Jesus!” and cited, in a handwritten note on the bill, the server’s “bad [rainbow equality sign] tatoo [sic]” as the basis.

All of this is to say that service employees face uncertainty due to the whims and biases of the customers they serve. And while paying people a living wage is obviously the ideal solution to this problem, in the meantime, no one should have to be subjected to the economic exploitation of managers confiscating and controlling their hard-earned tip money.

But there is hope. Lambda Legal has submitted comments in opposition to this regulation, and you can submit your own as well.

Here’s how to comment on the proposed rule that will give restaurant and bar owners the legal right to steal their employees’ tips:

  • Click here, and then click on the blue box that says “Comment Now!”
  • Write your comments into the comment box or attach a PDF.  
  • Remember to fill out the contact information and click “continue.” You will be able to preview your comments before clicking “submit.”

Comments must be submitted by 11:59PM on Monday, February 5, 2018.