The Labor Department has proposed a policy change that, if implemented, would designate restaurant employers as “owners” of tips paid by patrons. The proposal claims to give employers the freedom to distribute tips more equitably among workers but doesn’t require that distribution, or any distribution at all — meaning employers could legally keep tips for themselves. This parts with decades of Fair Labor Standards Act policy in which tips are considered the property of workers. Why would you bother leaving a tip in the first place if you have no idea in whose pocket it might or might not end up?
On one hand, it is heartening to see that the Labor Department has shown some willingness to rethink the arcane restrictions around tip distribution. Under current legislation, tips can only be shared with “guest-facing” service staff, which means cooks and dishwashers take home considerably less. That has created a troubling wage disparity, and our industry is fed up. But legislating tip distribution is not the way to solve the problem. Tips themselves are the problem, and we need to stop relying on them as a means to compensate this massive workforce.