It’s the part of the meal the mathematically challenged among us fear the most: Figuring out how much to tip the server. Even worse, you might be a bad tipper and not even know it. Figuring who should be getting tipped and the amount you’re supposed to give is bad enough. Now, here comes the U.S. government to complicate things. A proposed new law would let restaurant owners take servers’ tips by making tip pooling legal again. Here’s what you need to know about the situation.
What the new law is proposing
- Tip pooling is back in play.
Tip pooling is exactly what it sounds like. Tipped employees pool all their tip money together, tally it up later, and split it evenly. A 2011 law restricted tip pooling. The gist of that law, writes Glenn Grindlinger for Fox Rothschild, is this: “Whether a tip is to be given, and its amount, are matters determined solely by the customer, who has the right to determine who shall be the recipient. … Tips are the property of the employee.” The new law proposes putting tip pooling back in play.
Next: Servers rely on tips like you wouldn’t believe.
A bit of background
- There’s a reason why tip pooling isn’t loved by servers.
Restaurant servers and bartenders are the most visible of the many professions that heavily rely on tipping. Just how heavily they rely on tips might shock you. Research from Restaurant Opportunities Centers United shows servers get more than 58% of their income from tips. For bartenders, the rate is 54%. All told, the median monthly tip income for servers and bartenders is $867.
Considering 21 states have minimum wages at or below the federal level of $7.25, tip income is incredibly important in the service industry. Some employers pay servers only $2.13 per hour and rely on tips to make up the $5.12 difference. The new law would allow tip pooling as long as workers are making $7.25 an hour, according to Eater.
Next: Tons of lost income
Millions of workers could lose income
- Servers are just the obvious workers who will miss out.
According to the Bureau of Labor Statistics, there are 2.6 million servers in the United States. Every single one of them could miss out on tons of lost income because of tip pooling. We’re not even mentioning millions of other workers who rely on tips and would be impacted by tip pooling. We’ll discuss them in a bit.
Next: Big money is at stake.
Workers could lose billions of dollars
- The law would permit employers to take their share of tips
Whether or not you agree with no-tipping Quentin Tarantino character Mr. Pink, tipping is essential. Servers, bartenders, and bussers stand to lose billions of dollars under the proposed law. According to the Economic Policy Institute, the figure is $5.8 billion. Quartz reports the proposed law doesn’t require employers to distribute the tips. So managers and restaurant owners would be able to take any share of the tips they wanted. But wait, it gets worse. The Department of Labor intentionally hid data showing the billions of dollars in potential lost wages when it proposed the change, according to Bloomberg Law.
Next: The law would make things really bad for one portion of the population.
Why it’s bad
- The new law would affect one segment of the population more than the others
A law allowing employers to skim wages from workers via tip pooling is pretty unfair. Saru Jayaraman, President of Restaurant Opportunities Centers United makes it clear, saying, “Bloomberg’s report confirms what we already knew: That this new rule would constitute legalized theft of restaurant workers’ hard-earned tips.”
As we’ve just seen, $5.8 billion in wages could go back to employers, but one segment of the population would suffer the most. Women would be the biggest losers at $4.6 billion in lost wages if the law goes into effect.
Next: Would you believe we found an upside?
Why it’s good
- Wages for some workers aren’t keeping up
Stealing wages is never good a good thing, and with some sneaky employers, it happens more than you think. But believe it or not, there is a shred of good in the proposed law. You see, wages for the back of the house staff, such as cooks and dishwashers, haven’t kept pace with their service industry counterparts. Wages for the front of the house tipped employees are 300% higher than in 1987. Meanwhile, wages for kitchen staff and the like are up just 20% over the same timeframe.
Next: This goes beyond your dining experience.
Waiters and bartenders won’t be the only ones affected
- Tip pooling law could impact millions of other workers.
Servers, bartenders, and baristas are the most noticeable tipped workers. They aren’t the only workers who will be losing out if the tip pooling law is passed. There are also the forgotten workers that rely on tips. Workers like the 924,000 housekeepers, 673,000 barbers and stylists, and 45,000 bellhops in the U.S. will be affected if the law is passed.
Next: You have a chance to stop this.
What can you do?
- Make your voice heard, in the digital sense
You’re a server, and you’re 100% against the proposed law. Or you’re in favor of the law because you believe it’s unfair that back of the house workers haven’t enjoyed the same wage growth as others in the industry. Whether you’re for or against the proposed law, you can weigh in on the subject. A brief summary and public comments section are right here for people who want to make their voices heard.
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