New Legislation Could Prohibit Employers From Pocketing Workers' Tips

After outrage over a Trump administration proposal that would have allowed employers to keep workers' tips, a policy that protects servers' hard-earned gratuities may become law. Early on March 23, the House of Representatives approved a $1.3 trillion budget plan that includes a rider amending the Fair Labor Standards Act to make it illegal for employers, managers, and supervisors to take tips earned by workers.

The omnibus spending bill, which also included an increase in federal spending on defense, funding for the border wall, and efforts against the opioid crisis, was approved by the House with a 256-167 vote, according to Nation's Restaurant News. Shortly after the House passed the bill, President Trump threatened via Twitter to veto it because it does not include sufficient funding for his immigration policies.

According to the bill, "An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees' tips, regardless of whether or not the employer takes a tip credit."

If approved, the new rule would punish violators by forcing them to pay back all tips, including "the amount of the sum of any tip credit taken" plus "an additional equal amount as liquidated damages."

"Today represents a historic victory for restaurant workers," Saru Jayaraman, co-founder and president of Restaurant Opportunities Centers (ROC) United, said in a statement via a press release. "The National Restaurant Association wanted to steal workers' tips, but the workers said no — and they won. The fact that hundreds of thousands of workers stood up and said no to employers taking their tips, and that Congressional leadership listened and acted, is a testament to the power of workers standing up together."

Ever wonder what would happen if America pulled a full Europe and 86ed the gratuity system? These 11 restaurants banned tipping. Guess what happened next!