New York, NY—If a rule change proposed by the U.S. Department of Labor goes into effect, bartenders and servers could face a substantial pay cut, according to a new report by the National Employment Law Project and Restaurant Opportunities Center United (ROC).
The proposed change, backed by restaurant industry lobbyists, would roll back an Obama-era rule that protects workers in tipped industries—including restaurant servers and bartenders—from having their tips taken away by their employers. If the rule goes into effect, federal law would allow restaurant owners to confiscate and pocket all of the tips left by customers—without diners’ knowledge or consent—as long as restaurants pay their wait staff and bartenders at least the minimum wage.
NELP and ROC’s analysis confirms that servers and bartenders depend on tips for more than half of their earnings, with the median share of hourly earnings from tips accounting for 58.5 percent of wait staff’s earnings, and 54 percent of bartenders’ earnings. The median monthly tip earnings for wait staff and bartenders is $867, indicating that many of these workers depend on the money they earn though tips to pay for essentials like rent and utilities.
Even including tips, the median hourly earnings for servers and bartenders are a meager $10.11 per hour, just $2.86 above the current federal wage floor. Black and Latinx workers on average make even less, suggesting that the rule change is likely to greatly impact workers of color and their families.
Though these findings are just a snapshot, they suggest that the Trump administration’s proposed action could have a devastating effect on bartenders and servers.
“Tips belong to the workers, and for good reason. When we leave tips for workers, we expect that the money will help the worker who served us, not the business owner,” said Irene Tung, senior researcher with the National Employment Law Project and co-author of the report. “Workers depend on those tips to get by. The fact that tips constitute more than half the earnings for restaurant servers and bartenders means that tips are more than just pocket money—tip earnings can be what a worker relies on to make rent or pay for childcare.”
“The Trump administration’s proposed rule undermines decades of federal and state law and precedent that protects tips as the property of workers, not their employers,” said Teofilo Reyes, national research director of Restaurant Opportunities Centers United and report co-author. “Our research shows that allowing employers to take control of their employees’ tips would lead to greater financial instability and poverty. We also know that tip instability leads to greater sexual harassment for America’s restaurant workers. This rule would only serve to keep all restaurant workers’ wages low and let customer tips make up the difference.”
DOWNLOAD THE REPORT:
Wait Staff and Bartenders Depend on Tips for More Than Half of Their Earnings
The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. NELP’s mission is to ensure that all who work in our nation, or aspire to do so, will achieve and sustain economic security, opportunity, and prosperity through their labor. For more about NELP, visit www.nelp.org.
Restaurant Opportunities Centers United (www.rocunited.org) is committed to improving wages and working conditions for the nation’s restaurant workforce. ROC United has nearly 25,000 worker members, over 300 restaurant employer members (www.raiserestaurants.org), and thousands of engaged consumer members (www.dinersunited.org) nationwide united for raising restaurant industry standards.
