- The Trump administration proposed a rule that would force waiters and bartenders to share their tips.
- Opponents of the rule fear that restaurant employers would pocket most of the tip money for themselves.
- One estimate pegged the amount employers could keep at $US5.8 billion.
Restaurant servers could see their paychecks take a hit if a newly proposed Trump-administration policy goes through.
The Department of Labour proposed this month to roll back a 2011 Obama-era policy, The Fair Labour Standards Act, that allows restaurant employees to keep their tips instead of having to share them with their non-tipped employees.
Forcing servers to pool their tips could redirect some of their earnings to non-tipped workers, such as the line cooks who make hourly wages. However, opponents of the measure fear it will lead to employers pocketing the shared tip money for themselves.
The proposed regulations are “not just about sharing tips with the back-of-the-house staff – that part would be OK – but employers would have the right to decide what to do with the tips,” Saru Jayaraman, president of Restaurant Opportunities Centres United, an advocacy group for restaurant workers, told The Washington Post.
In fact, if the proposal becomes law, employers could pocket $US5.8 billion of workers’ tips nationwide, according to an estimate from the left-leaning think tank Economic Policy Institute.
“This rule will result in a substantial shift of tips from workers to employers,” a report from the think tank said.
According to Reuters, The Supreme Court is considering whether to review a challenge to the Obama-administration tip-pooling ban by the National Restaurant Association and other groups.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.