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The Labor Department’s dumb proposal regarding tipping

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There’s a fight brewing between congressional Democrats and the Department of Labor over a proposed policy change affecting the restaurant industry. An Obama era regulation from the Labor Department clarified that tips left by patrons in restaurants are the property of the server who was given them. As usual, this really shouldn’t have been a matter for Washington to decide on behalf of a private industry, but in general terms, it was one that many of us weren’t going to argue over too much. You tip primarily based on the service you receive, not how good the food is or how nicely appointed the eatery might be. The wait staff isn’t responsible for those things.

Now, Trump’s Labor Department is looking at changing that. The new interpretation would allow the owner to confiscate the tips and divvy them up between various employees based on their own house policy. The Democrats are crying foul, though for all the wrong reasons. (Washington Examiner)

Liberals are trying to pressure the Trump administration into walking back a proposal to allow restaurant owners to be able to take tips given to waiters and bartenders.

The restaurant industry argues that such a change would allow the owners to redistribute the money among employees, but Democrats and their allies announced Friday they will hold a forum next week to emphasize the potential negative impact of the rule as well as highlight “the issues with the [Labor Department’s] rulemaking process.”

The Labor Department published a proposal in December to rescind an Obama administration regulation that clarified that tips were the property of the employees who received them.

It’s fair to describe this as a “pro-business” policy change because many restaurant owners would like to have that option. But the only reason they feel they need it is because of the rapidly shifting minimum wage situation. Traditionally, the wait staff would earn a lower amount of money than the “back of the house” workers such as the barbacks, busboys and dishwashers. They made up for that with their tips, and the really good ones could do quite well. But when they receive a big wage increase on top of their tips, owners argue that they can’t recruit people to do the non-tipped work, leaving them with this idea of confiscating the tips and spreading them around to everyone.

The problem with the Democrats’ argument is that they’re summoning up visions of “unscrupulous managers who might keep the money for themselves.” (As if anyone could get away with that for very long.) Basically, they’re using this policy debate as a way to argue for higher minimum wages.

The real solution would be to not insist on tipped wait staff getting the minimum wage and going back to the way it used to be. Of course, that runs contrary to progressive principles so you won’t hear it from Keith Ellison and the rest of his liberal colleagues who are pushing to stop this change. So some owners should be able to let the wait staff keep their tips, while others may instruct those workers to “split” a portion of their tips off for the back of the house. This is a complicated challenge for restaurants and different ones work out systems which suit their local needs best. What they don’t need is the federal government micromanaging every aspect of their business like some sort of socialist overlord.

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