Workers Will Lose Billions In Tips Under Trump Proposal: CA AG

CALIFORNIA -- A Trump Administration proposal would allow employers to pocket tips, resulting in the loss of billions of dollars for low-wage workers, California Attorney General Xavier Becerra said Monday.

Becerra joined 16 other attorney generals in formally announcing their opposition to a proposal to rescind a 2011 rule that would allow business owners to have more control over the tips employees earn. As it stands now, the Fair Labor Standards Act only requires employees to share their money if it's shared among traditionally tipped workers.

Supporters of the proposal said it will benefit workers such as cooks and dishwashers who aren't traditionally tipped.

But, Becerra said the proposal would give employers the opportunity to pocket billions of dollars in tips. Citing the progressive group, Economic Policy Institute, Becerra said employers could take up to $5.8 billion.

“When customers tip an employee, they expect their money to go to the employee, not the employer," Becerra said. "Hardworking men and women, especially those who are paid close to the minimum wage, depend on every penny they've earned to feed their families, keep a roof over their heads, or advance their education or careers. The California Department of Justice is prepared to use every tool at our disposal to protect these hardworking Americans."

Becerra also commented on the Bloomberg reportthat the Department of Labor hid an internal analysis stating that billions of dollars could be lost.

"We file our opposition today with a particular sense of urgency, given that the U.S. Department of Labor reportedly took action to obscure the unfavorable economic analysis showing that workers could lose billions in earnings if the proposed change goes into effect," Becerra said.

California law requires employers to pay all employees a cash minimum wage and prohibits employers from commandeering “any gratuity or a part thereof” intended for an employee, Becerra's office said.

The Department of Labor estimates there are more than one million tipped servers, and more than 200,000 tipped bartenders across the U.S.

--Patch file photo