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Trump Administration: Employers Can Take Worker's Tips


The Trump administration has taken steps to make it legal for employers to snatch their employees' tips. A proposal from the U.S. Department Of Labor gives freedom to employers to pool tips and share it between traditionally tipped and non-tipped workers.

However, as long as the employees make minimum wage, employers wouldn't have to distribute those tips.

In a statement, the U.S. Department of Labor on December 4 announced a Notice of Proposed Rulemaking or NPRM regarding the tip regulations.

The proposal is expected to help decrease wage disparities between the tipped and non-tipped workers.

Under the proposed rule, restaurateurs can collect tips earned by front-of-house staff and share it with more employees. The option is currently restricted by a rule promulgated in 2011 that has been challenged in a number of courts.

The proposal allows sharing tips with employees who do not traditionally receive direct tips, such as restaurant cooks and dish washers, who are called "back of the house" employees. Even though they contribute to the overall customer experience, they may receive less compensation than their traditionally tipped co-workers.

The proposal could also mean employers could keep tips for themselves or the business.

According to the government, the proposal only applies where employers pay a full minimum wage and do not take a tip credit.

The proposal would not affect current rules applicable to employers that claim a tip credit under the FLSA, it said.

The proposal, published in the Federal Register on December 5, will be available for public comment for 30 days, before it goes in to effect.

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