The Labor Department is under heightened attack today from Democrats, who are demanding the release of economic data that Bloomberg Law reported was scrubbed from the agency’s tip pool proposal.
Four House Democrats, in an oversight letter sent this morning to Labor Secretary Alexander Acosta, asked the DOL to fork over copies of all analyses completed as part of the tip pool rulemaking process. Their letter cites Bloomberg Law’s reporting that the department conducted, and then shelved, estimates that up to billions of dollars in worker tips could flow to employers as a result of the December proposal.
“Such conduct raises serious questions about the integrity of the Department’s rule making process,” wrote the top Democrat on the House Education and Workforce Committee, Rep. Bobby Scott (Va.) and his colleagues. The lawmakers gave the DOL a Feb. 5 deadline to submit a response.
Through its proposal to reverse a 2011 regulation, the DOL wants to allow tip pooling among restaurant servers and other workers who earn gratuities and back-of-the-house employees who don’t. But if businesses pay tipped workers the full minimum wage of at least $7.25 per hour, the rule would not prohibit employers from taking part in the tip-pool themselves. The agency, however, deemed it too speculative at the proposed rule stage to quantify a projected transfer of tips to employers.
“Through the proposal, the Department requested public input regarding how to best quantify the costs and benefits in the NPRM,” a DOL spokesman told Bloomberg Law in a statement. The agency said it plans to use this publicly submitted data to inform a more reliable estimate in the final rule on tip pooling.
Senators Also Weigh In
In addition to the demands for the DOL to divulge its analyses, the Democrats want a copy of all communication between the DOL and White House Office of Management and Budget pertaining to the quantitative economic analysis.
Bloomberg Law’s report, based on four current and former DOL sources, also noted that the OMB was aware of the department’s internal analyses and was working with the agency on its methodology. Ultimately, after successive methodologies gradually lessened the transfer impact, Acosta was still too uncomfortable with its inclusion in the published proposal. The secretary then got the White House to approve the data’s deletion, sources said.
A Democratic staffer, speaking with Bloomberg Law Feb. 2, said the letter will just mark the starting point in a broader congressional effort to seek more information in the White House-agency regulatory process. This is especially the case because of the slew of deregulatory actions the Trump administration is taking to roll back rules from the Obama White House.
The letter, also signed by Democratic Reps. Mark Takano (Calif.), Keith Ellison (Minn.), and Suzanne Bonamici (Ore.), follows pressure Feb. 1 from Sen. Elizabeth Warren (D-Mass.) for the DOL to explain why the analysis is hidden from the public. Sen. Patty Murray (D-Wash.), the ranking member of the Senate labor committee, also called on the administration to scrap the proposal entirely.