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NWLC Opposes DOL Proposed Rule Allowing Employers to Take Their Employees’ Tips

Late in 2017, the Trump administration’s Department of Labor (DOL) announced a Notice of Proposed Rulemaking proposing a regulation change that could result in employers stealing as much as $5.8 billion of workers’ tips from employees each year. Given that women are 2 in 3 tipped workers—and that a whopping $4.6 billion of that $5.8 billion would come from women’s pockets—this new change is poised to strike a heavy blow to women already struggling to make ends meet.

But that’s not all. On February 1, 2018, Bloomberg Law reported that DOL concealed an analysis by its own staff that showed the proposal would cost workers billions of dollars. Instead of releasing the analysis to the public, the agency’s leadership hid the information and claimed it couldn’t estimate the full economic effects of transferring ownership of tips from the employees who earned them to their employers. Now, DOL’s Office of Inspector General (OIG) has initiated an audit into this rule making process.

In response, the National Women’s Law Center filed three letters with DOL. In substantive comments on the proposed rule, we voiced our strong opposition and alerted DOL to the negative effects of the rule on women in particular. Most tipped workers are women, and they already face long hours, low wages, and disproportionately high rates of sexual harassment and assault on the job. This rule would only make them more vulnerable to harassment as they must try to please both customers AND their employers in order to keep their tips. 

In an additional letter submitted when the report emerged that DOL had concealed its own economic impact analysis, we demanded that DOL immediately withdraw the proposed rule — not only because it would cost working women billions each year, but because the integrity of the rule making process has been compromised by the agency’s deception.  Finally, in light of the pending OIG investigation, we called on DOL to allow the comment period to remain open until at least 15 days following the release of the OIG’s final audit report.