Committee Democrats Praise Biden Proposal to Strengthen Pay Protections for Tipped Workers
Biden proposal comes after it delayed part of a Trump-era rule that was projected to cost tipped workers $700 million a year
WASHINGTON – Today, Chairman Robert C. “Bobby” Scott, Workforce Protections Subcommittee Chair Alma Adams, Rep. Mark Takano (D-CA), Rep. Suzanne Bonamici (D-OR), and Rep. Pramila Jayapal (D-WA) praised the Biden Administration for its proposed changes to strengthen pay protections for tipped workers. The Biden proposal makes clear that tipped workers may only be paid the $2.13 per hour tipped minimum wage when they are performing tip-producing work or performing work that directly supports tip-producing work for a limited amount of time.
The proposal would reverse portions of a Trump-era rule, which the Biden Administration has delayed from going into effect, that would loosen restrictions on how much time tipped workers could be assigned tasks that do not produce tips and still be paid the tipped subminimum wage. A report from the Economic Policy Institute estimated the Trump rule would cost tipped workers more than $700 million every year.
The Trump Administration’s changes to the tip rule reversed three decades of precedent in which the Department of Labor enforced guidance, commonly referred to as the “80/20 rule,” that limited the use of the tipped subminimum wage where a tipped worker spends more than 20 percent of their workweek on tasks that do not produce tips.
“For nearly three decades, the Department enforced guidance that placed clear limitations on the use of the tip credit under the Fair Labor Standards Act,” the Members wrote in a letter to Labor Secretary Marty Walsh. “Without the safeguard of the 80/20 rule, tipped employees could lose tipped income by spending more of their time performing duties where they are not earning tips, while still receiving cash wages of less than minimum wage.”
The Biden proposal builds on this long-held 80/20 standard by also limiting the use of the tipped minimum wage where a tipped employee spends more than 30 consecutive minutes on work that does not directly support tips. The Biden proposal also provides more clarity around which activities are classified as directly supporting tip-producing work.
“The most protective standard for tipped workers is ensuring they are paid the full federal minimum wage for all hours worked; unfortunately, Congress has not yet passed such a law. As such, we support the Department’s proposal to withdraw the 2020 Tip Rule and repropose a stronger standard that will better protect tipped workers,” the Members wrote.
To read the letter, click here.
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