Back in the beginning of February, I looked at a proposed rule from the Department of Labor which would allow restaurant owners the option of seizing tips left by customers for the wait staff and redistributing the money among other workers or even the management. Needless to say, I described this as “a dumb rule.”
It turns out that a decision was made by Congress rather than the Labor Department and it was snuck into the recently passed omnibus spending bill. The Washington Post reported on it this week, explaining that a compromise had been reached which will satisfy nobody, but isn’t quite as bad as it might have been.
Tucked into Congress’s 2,200-plus-page omnibus spending bill are a few paragraphs that will prohibit restaurant owners from sharing server tips with supervisors, managers and themselves. But the provision will also allow employers, in some circumstances, to share tips with dishwashers, cooks and other back-of-the-house employees who have traditionally been underpaid compared with their counterparts in the dining room.
Both sides in the tipping wars are claiming victory: worker advocates, who see the provision as a bipartisan rebuke to a proposed Labor Department rule last year that could have legalized a practice now considered wage theft under the law, and the National Restaurant Association, which had been pushing to rescind a 2011 regulation that prohibited tip pooling for back-of-the-house employees in all circumstances.
Signed into law Friday by President Trump as part of the $1.3 trillion spending deal, the new provision gives the restaurant association what it says it wanted all along in its ongoing lawsuit against the U.S. Department of Labor: the freedom for employers to establish pools to share server tips with other hourly workers in the restaurant, especially low-paid line cooks and dishwashers. The idea is that the extra cash will help owners retain back-of-the-house employees and balance the income disparities between line cooks and dishwashers (often Latino) and servers and bartenders (frequently white).
So the bottom line is that management won’t be able to seize the tips made by the wait staff and keep the money for themselves, but they will be able to take the tips, “pool” them and distribute a portion to the so-called “back of the house” staff. (Those are generally the line cooks, busboys and dishwashers you rarely see when dining.) Is it a compromise? I suppose so. Is it a good compromise? Not really.
Taking the wait staff’s tips from them and dumping them into the establishment’s overall till would destroy the concept of high-end wait staff service as we know it. It would also be simply wrong. Being a waiter or waitress is some grueling work to begin with and it doesn’t pay well at all. Being an exceptionally good server is a rare thing, deserving of applause and compensation. Diners, particularly at more upscale eateries, don’t leave tips because they like the decor or really even the food. They tip based on the experience they have with the server. The server earns that money by excelling at their job.
If you’re going to rob them of some (but not all) of their tip money, I suppose you might make the argument that giving it to the dishwashers who are lucky to earn minimum wage is better than other options. But that doesn’t make it a good plan. The National Restaurant Association has been arguing that it’s too hard to hire and keep good help in the back of the house, but that’s really not the problem of the servers. You either need to compensate your workers a bit better to keep the good ones or deal with a high turnover rate.
Also, we should keep in mind that dishwashing isn’t supposed to be a career. It’s a starter job, much like flipping burgers at a fast food chain. It gets you some employment experience and a little money while you try to work your way up to better career options. Nobody takes a job like that back in the kitchen with dreams of retiring as one of the most successful dishwashers in the country. Conversely, some waiters and waitresses can do quite well for themselves and stay in that line of work for their entire career.
If there’s going to be tipping (and there’s no reason to do away with it) then the people who actually earn the tips should get to keep them. This compromise is flawed and this decision deserves a second look once the dust settles.