Trump Labor Department hid how its tip-pooling rules would harm workers

Photo: Win McNamee/Getty Images

Trump’s Labor Department head went around other White House officials to publish a proposal that disguised the real cost of new tip-pooling rules.

On Wednesday, Bloomberg Law reported that Labor Secretary Alexander Acosta hid data showing that the Trump administration’s proposed tip-pooling regulations could allow businesses to take $640 million in tips from workers.

The tip-pooling regulations would allow employers to redistribute tips amongst employees, but would also allow them to simply take workers’ tips as part of their profits, as long as tipped workers still make minimum wage.

The $1.3 trillion spending bill that passed the House on Thursday contains a provision that would remove employers’ ability to keep workers’ tips, while still allowing employers to collect and redistribute tips.

The version of the rule that lets businesses take employees’ tips would cost workers $5.8 billion each year, according to research by the Economic Policy Institute.

In February, Bloomberg reported that Department of Labor research also showed workers could lose billions of dollars in tips, but department officials ordered staff to revise the data using a different methodology to produce more favorable numbers.

According to Bloomberg’s Wednesday report, the revised data showed businesses would take $640 million from workers. But ultimately, the department published a proposal that failed to include even those lower numbers.

The White House Office of Information and Regulatory Affairs (OIRA) reportedly tried to block Acosta from releasing the proposal without numbers showing businesses could take hundreds of millions of dollars from employees.

So instead, Acosta went to Office of Management and Budget Director Mick Mulvaney, who oversees OIRA. Acosta reportedly convinced Mulvaney to allow the Labor Department to publish the proposal without the data, going over the head of OIRA Administrator Neomi Rao.

“It’s pretty apparent that in this case and potentially others, the administration [is] willing to manipulate the cost-benefit numbers to make them look good for their attempts to roll back regulatory protections,” Amit Narang, a regulatory policy advocate at Public Citizen, told Common Dreams.

The Office of Management and Budget disputed the idea that Rao and Mulvaney would have disagreed about publishing the proposal.

“The premise of this reporting is false: there is zero daylight between Director Mulvaney and Administrator Rao on regulatory policy,” OMB spokesperson Coalter Baker told Bloomberg.

The money that could be taken from workers under the Trump administration’s tip-pooling proposal would come in addition to the rampant wage theft workers already face.

A 2009 study of New York City, Los Angeles, and Chicago found that 12 percent of tipped workers experienced their employer or manager stealing their tips. 30 percent of the same sample of tipped workers weren’t even paid the minimum wage.

A recent POLITICO investigation found that even when workers are able to win back pay from their employers for such wage theft, businesses fail to give back 41 percent of the money they’re ordered to pay employees.