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Servers and other restaurant workers who receive tips may soon be required by their employer to share that extra money with non-tip staff members, such as dishwashers and cooks, according to a new policy announced Tuesday by the Ministry of Labour.
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Under the new rule, employers are not allowed to keep their employees’ tips, whether or not the employer accepts tip credit under the Fair Labor Standards Act. Employers who illegally keep their employees’ tips will be subject to civil penalties not exceeding $ 1,100.
Restaurant managers and supervisors are also prohibited from retaining employee tips or participating in a tip pool.
In this September 29 photo, restaurateur Samantha DiStefano, left, of Mama Fox, prepares menus for patrons who dine out at her Brooklyn, New York establishment. (AP Photo / Kathy Willens, file)
The regulation removes a 20% limit on the length of time an employee for whom an employer takes tip credit can perform related duties without a tip. The rule states that employers can apply tips as part of the minimum wage payment when a worker performs tasks without tips for a “reasonable time” before or after performing tipped tasks.
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Cheryl Stanton, the Department of Labor’s wages and hours administrator, said the new rule “clarifies things for employers” and could increase the wages of workers who have been “excluded from tipping in the past. “
Additionally, she asserted that the newly authorized tip sharing can “reduce the wage gap between all workers who contribute to the customer experience.”
The FLSA requires covered employers to pay their employees at least the current federal minimum wage of $ 7.25 per hour. Under federal law, tip workers can be paid as little as $ 2.13 an hour, provided they earn enough tips to match the federal minimum wage.
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Heidi Shierholz, policy director at the Institute for Economic Policy and an economist in the Department of Labor under the Obama administration, told the Wall Street Journal that the move “will allow employers to transfer work from workers without tips to workers. without tip “.
Shierholz also argues that the rule does not address wage inequality, adding that if the Trump administration wanted to raise wages for backcountry workers, “they could have supported an increase in the minimum wage.”
The final rule, an amendment to the Consolidated Appropriations Act of 2018, will take effect in 60 days, according to the Labor Ministry.
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