Trump Administration Raids Workers’ Tip Jars, Buries Data Showing That’s a Horrible Idea

, director, Center for Science & Democracy | February 7, 2018, 4:10 pm EST
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In December the Trump administration proposed a new rule that specifically allows employers to control and distribute tip income as they see fit, taking away control of tip money from the employees—food servers, baristas, and many other hardworking people—who earned it.

Now it has come to light that the Department of Labor, which proposed the rule, has provided yet another example of the Trump administration following its science motto: “If the data don’t tell you what you want to hear, bury the data.” In this case, by suppressing data and analysis from the department’s own experts showing the economic impacts of this rule.

People are always hurt by such an approach, and the casualties this time are the people who serve restaurant meals for minimum wage or less.

“Tip pooling”—banned for good reason

Last fall, the department halted a rule put in place in 2011 that banned the practice of “tip pooling” in restaurants and other businesses. The idea of the original rule was to ensure that when patrons add tips to their bills, that money is controlled by employees, not restaurant owners or managers. This is important because in many states, servers are exempt from the legal minimum wage—making as little as $2.13/hour in some states—so their incomes rely heavily on tips. But the Trump administration not only rescinded the pooling ban, it went further in December, proposing a new rule specifically allowing employers to control and distribute tip income as they see fit.

It has created a lot of controversy to say the least. Hundreds of thousands of tipped workers, the vast majority women,  may lose as much as $5.8 billion in income if the rule is finalized. Our allies at the Restaurant Opportunities Center United have warned that opening the door to tip theft would also exacerbate sexual harassment in an industry already rife with it, as it would give employers extraordinary power over their workers’ tips.

Suppressing the evidence

As a matter of human rights and fairness this is an important issue, but is it a science issue too?  Unfortunately, yes. That’s because, in the course of overturning this worker protection, the Trump administration suppressed data and analysis from their own staff showing the economic impact of the reversal. That impact comes from transferring income away from waitstaff to a broader set of workers, or to employers who directly retain some of the money.

Public policy decisions like these are supposed to be based on the best data and analyses available and the decision itself must be weighed and justified based on that evidence. And the public must have access to that information when the department takes comments on the proposed rule.

In this case, Labor Department analysts compiled data on the economic effects of the rule change, but according to Bloomberg, political appointees at the Labor Department later ordered the staff to change the analysis to appear more supportive of their proposal to allow tip-pooling. When changes to the data and analysis were still not sufficient to show the proposal favorably, the administration just buried the report altogether.  Not only does that misinform the public and industry, it also manipulates the decision process itself and “tips” it in favor of the administration (pun intended).

Unfortunately, this action to sideline science in order to allow politics and influence to rule the day is not unique to the Department of Labor, but is rife throughout this administration. In this case, the attorneys general of 17 states are warning that the administration’s failure to release its data on tip pooling is illegal under federal rulemaking law.

We need to push back with our elected representatives and demand the rule be withdrawn. This administration, like any other, may have policies it wants to advance, but they must do the scientific analyses straight up and allow the public to have a voice.  Misinforming the public shouldn’t be an acceptable tactic for pushing ahead with public policies that hurt everyday hard-working people.

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  • Greg

    Is this a good opportunity to go like Europe, Asia, and most of the rest of the world and have restaurants pay a living wage plus benefits and eliminate the tipping system to pay workers?