A waiter setting a table in a plastic bubble outside a New York City diner on Dec. 15. workers.
Photo: carlo allegri/Reuters
Servers and other workers who receive tips could be required to share that gratuity with non-tipped staff members, under a final regulation the Labor Department announced on Tuesday.
The rule is the culmination of more than three years of work by the Trump administration to deliver the regulation long sought by the restaurant industry.
“This final rule provides clarity and flexibility for employers and could increase pay for back-of-the house workers, like cooks and dishwashers, who have been excluded from participating in tip pools in the past,” Cheryl Stanton, the Labor Department’s wage and hour administrator, said in a statement. Newly allowed tip sharing can “reduce wage disparities among all workers who contribute to customers’ experience,” she added.
Advocates for low-wage workers, however, have criticized such proposals in the past. They say employers should pay nontipped staff—like cooks and dishwashers—more, rather than asking servers and others receiving gratuities to supplement the wages of others.
The rule is set to go into effect in 60 days.
It is possible that the Biden administration could take action to stop the rule from going into effect, or could begin work to produce its own rule. The Obama administration issued a regulation barring the practice of tip sharing, but stopped enforcing the rule after it was challenged in court.
Write to Eric Morath at [email protected]
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