HERRING TELLS TRUMP ADMINISTRATION TO LET WORKERS KEEP THEIR TIPS
~ By rescinding Obama-era rule, Trump Administration could allow employers to take up to $5.8 billion in tips from their employees every year ~
RICHMOND (February 5, 2018)– Attorney General Mark R. Herring today filed his strong objection to President Trump’s plan to take money out of the pockets of tens of thousands of Virginia workers and give it to employers. The Trump Administration has proposed ending the 2011 federal rule that ensured workers get to keep the tips they have earned, rather than allowing employers to take them. According to the Economic Policy Institute, ending the rule could result in employers taking up to $5.8 billion of workers’ earned tips. The U.S. Department of Labor (DOL), which is spearheading the rule change, is reportedly hiding an economic analysis that highlighted the billions in gratuity earnings that workers could lose. According to the Bureau of Labor Statistics, 1.95 million Virginians were paid hourly rates in 2016. Of those, 26,000 earned exactly minimum wage, while 57,000 earned less than the minimum wage.
“Millions of workers in Virginia and around the country work hard to earn tips and help support themselves and their families. To allow someone’s boss to just take their tips is an almost cartoonish level of villainy that only this administration could dream up,” said Attorney General Herring. “This proposal is fundamentally unfair to hardworking Virginians who, in many cases, are already living on a tight budget. It’s also concerning that the Department of Labor is reportedly hiding its analysis of just how much this rule repeal might hurt workers. I’m proud to stand up for working Virginians against this unfair and unjust proposal.”
Under the Fair Labor Standards Act (FLSA), employers are required to pay their employees the federal minimum wage. Employers can meet this requirement either by paying employees the full cash federal minimum wage – currently $7.25 per hour – or by paying a lower cash wage, no less than $2.13 per hour, and making up the difference with the tips that the employee earns. The latter practice is known as a “tip credit.” The Trump Administration’s proposed rescission of the 2011 rule would allow employers who pay employees the federal minimum wage to claim the employees’ tips for any purpose.
“The undersigned state attorneys general believe that the rescission of the 2011 regulations would be inconsistent with the long-established cultural and legal understanding of tips as the property of the employees who earn them and state laws reflecting those views,” write the attorneys general. “If implemented, the rescission would greatly harm millions of employees in the United States who depend on tips and would create the real potential for customers to be deceived as to whom will receive and benefit from their tips… Most critically, it would harm low-wage tipped employees who can little afford to subsidize their employers.”
Attorney General Herring joined 16 other state attorneys general in objecting to the proposed rescinding of the rule. In addition to Attorney General Herring, the letter to Secretary of Labor Alexander Acosta is signed by the Attorneys General of California, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington, Vermont, and the District of Columbia.