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For Immediate Release

Press Release

Secretary Acosta Went to Great Lengths to Bury DOL’s Analysis Showing His Tip Rule is Bad For Workers

WASHINGTON -

Last December, the Department of Labor (DOL) issued a proposed rule that would make it legal for employers to pocket their workers’ tips.

In a highly unusual move, DOL did not provide an estimate of the dollar amount of tips that would be shifted from workers to employers as a result of the rule—even though they were required, as a part of the rulemaking process, to assess all quantifiable costs and benefits to the fullest extent possible. DOL initially claimed they could not do an analysis, when in actuality they did produce an estimate—and then buried it because it showed the rule would be terrible for workers.

Thanks to excellent reporting, we now know that Secretary of Labor Alexander Acosta went to the highest level within the White House Office of Management and Budget to get the green light he needed to bury the required analysis.

This shows the lengths to which Acosta will go to hide the fact that under his watch, DOL is taking steps to actively make workers’ lives worse.

If this rule were finalized, (1) tipped workers would lose $5.8 billion a year in tips, with $4.6 billion of that coming from the pockets of women working in tipped jobs, (2) the take-home pay of back-of-the-house and other nontipped workers would remain largely unchanged, and (3) restaurant owners and other employers of tipped workers would get a $5.8 billion a year windfall.

Acosta should withdraw DOL’s proposal that would make it legal for employers to take workers’ tips. He should focus on things that promote DOL’s mission of serving working people, not undermining their earnings.

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EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.

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