Report: Tipping Rule Change Would Cost Women $4.6 Billion

January 25, 2018 by · Leave a Comment 

SACRAMENTO, Calif. – As women’s marches took place across the country Saturday, time was

Workers could be forced to turn over tips to their employers under a rule proposed by the Trump administration. (SRandCo/Morguefile)

running out to put in your two cents about a rule proposed by the Trump administration that a new report says could cost female workers $4.6 billion in tips a year.

The Department of Labor wants to rescind Obama-era rules that barred employers from seizing their workers’ tips.

Researchers at the Economic Policy Institute found that the change could cost tipped workers overall $5.8 billion a year.

Study co-author Heidi Shierholz says women would take 80 percent of the hit.

“Tipped workers are going to see a huge hit to their take home pay, and employers will be enriched because the vast majority of tipped workers are women,” she states. “Because women earn lower wages, they are far more disproportionately harmed by this rule.”

The administration defends the change as a fairness issue, saying it will facilitate tip pooling, which would allow restaurants, for example, to take the wait staff’s tips and spread them around to the dishwashers and cooks.

However, nothing in the rule stops employers from simply pocketing the tips, as long as everyone makes at least minimum wage.

The public comment period on ends Feb. 5.

Shierholz maintains the rule change would not end up helping non-tipped workers.

“They’re already paying those workers what they need to get workers in those jobs, and so if they do share any tips with workers at the back of the house, it will very likely be offset with declines in their base pay,” she points out.

Shierholz notes that the administration failed to conduct an economic analysis of this rule change, which is required by law. That could become the basis of a law to stop the change – if the administration finalizes the rule.


Labor Advocates Lament Lack of Protections in New Foreign-Worker Visas

July 20, 2017 by · Leave a Comment 

SACRAMENTO – Criticism is coming in from worker’s-rights groups on the Trump administration’s announcement Monday that it will allow an additional 15,000 foreign workers to get visas.

The Department of Homeland Security will grant the extra H-2B visas for guest workers in the tourism, landscaping, construction, seafood and other seasonal industries – but not in agriculture, which uses a different visa program.

Daniel Costa, director of Immigration Law and Policy Research at the Economic Policy Institute, a nonprofit think tank, says the program ought to be reformed to protect workers from abuse, not expanded.

The way the program is set up, it ties workers to one employer,” he says. “So if they leave that job or if they get fired, they basically lose that visa status and become deportable. And so it gives employers a lot of power over workers.”

The Trump administration says it simply is trying to accommodate requests from employers who are desperate for laborers. The current limit for H-2B visas is 66,000 – so this will bring that number up to 81,000.

In a recent report, Costa found there is no nationwide shortage of workers in those fields. In fact, unemployment has been high and wages have been flat in these types of jobs for more than a decade.

He argues that expanding the cap on visas will hurt conditions for guest workers and American citizens alike.

“U.S. workers have to compete with workers who are exploitable and can be legally underpaid under the terms of the H-2B program,” he adds. “And so that puts downward pressure on the wages and the working conditions of the U.S. workers who are in those same jobs.”

The report suggests that companies experiencing a local labor shortage do more to recruit from out of state and raise wages and benefits to attract more applicants. The expansion was approved a few months ago as a rider to a must-pass omnibus spending bill.

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