By Nick Gale, WLS-AM 890 News
(CHICAGO) — Attorney General Lisa Madigan has filed comments in opposition to a proposal by the federal government that would rescind a rule protecting hourly workers’ tips.
Madigan and the attorneys general from California and Pennsylvania led a coalition of 17 attorneys general in filing the comments with the U.S. Department of Labor against the Department’s proposed rescission of the 2011 rule. The rule had clarified that tips earned are the sole property of employees in all circumstances. That means the practice of management pooling tips and redistributing them to servers as well as the back-of-house staff isn’t allowed. Under the Department’s proposed rule change, employers would be allowed to keep tips earned by employees who are paid the federal minimum wage – currently $7.25 per hour.
In Illinois, Madigan says an estimated half a million workers could see their tips taken by the federal government’s action, according to information from the Bureau of Labor Statistics. Nationwide, the Economic Policy Institute estimated it could result in employers taking up to $5.8 billion of workers’ earned tips.
“The Department of Labor’s proposal is outrageous,” Madigan said. “Not only do workers deserve the money they have earned for the service they provided, but millions of customers who leave tips expect that money to go to the employee who helped them. Hardworking people will see their earnings essentially stolen by their employer.”
Under the Fair Labor Standards Act, employers are required to pay their hourly employees the federal minimum wage. Employers can meet this requirement either by paying employees the full cash federal minimum wage 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 Department’s proposed rescission of the 2011 rule would allow employers who pay employees the federal minimum wage to take the employees’ tips.
Proponents of the move to rescind the rule, such as restaurant industry lobbyist groups, say rescinding the rule would help workers like busboys.
@ 2018 WLS-AM News
