Restaurant Workers Have Protections Under The New Budget Bill: Here Is How To Stay Within The Law.

Restaurant Workers Protections

Restaurant workers protection is now a real thing now that the US government has passed its latest budget proposal. The law now offers protection for employees who receive tips, including restaurant workers. President Trump initially opposed the bill but finally signed it into law.

According to the new budget bill, employers, managers, and supervisors don’t have the right to collect or retain their employees’ tips. The restaurant industry backed the proposal. Moreover, they agreed to allow waiters and waitresses to share the tips with back-of-house workers, such as cooks and dishwashers.

To comply with the law, you cannot keep the tips your waiters and waitresses receive. Moreover, you can only redistribute tips to employees who don’t receive tips if all the workers are making the standard minimum wage. Keep in mind that this does not apply in cases where the workers who receive the tips are making the state-mandated minimum wage, which is lower. In addition, the tip pool will exclude managers, supervisors, and owners.

This practice is equivalent to back-door wage theft. As an employer, you cannot incentivize supervisors and managers with the promise of tips. The proposed penalties under the new bill for tip theft are effective deterrents. Thus, the law offers a legal right (such as the right for workers to bring a civil lawsuit) to recover their stolen tips. Moreover, they can recover liquidated damages as well as any short-fall in the minimum wage. The Carlson Law Group recently published a tip-pooling guide that explains the legal ramifications of tip pooling to stay within the law.

The Labor Department can impose monetary penalties of up to $1,000 for each violation of this new law. This victory for tipped workers indicates, once again, the immense power that employees can wield. Irrespective of how the existing Labor Department proceeds with this rule, the law is in force, and tips go only to the workers.

In recent years, many high-profile restaurateurs and chefs faced lawsuits for alleged wage theft. Some prominent examples include Mario Batali, Jessica Biel, Daniel Boulud, and the owner of Sushi Nakazawa in New York.

This bill is a landmark victory for tipped workers. The original proposal from the Department of Labor granted employers the right to retain tips if they were paying the federal minimum wage to their employees. Hence, this decision is a testament to how well the workers contested the decision. Moreover, according to the Economic Policy Institute, this rule would allow employers to pocket almost $6 billion in workers’ tips on an annual basis, which is an unacceptable outcome.

A few Congressional leaders, including Senator Patty Murray (WA) and Representatives Katherine Clark (MA), Rosa DeLauro (CT), and Bobby Scott (VA) opposed this new proposal every step of the way. In the end, Senator Patty Murray successfully negotiated with the Department of Labor. Finally, they relented and allowed workers’ complete right to their tips.

Are you ready to explore financing options to expand your restaurant? With decades of experience, ARF Financial is a lender you can trust. We have a quick and simple funding process with no need for collateral. Click here to apply now and receive an immediate quote. This quote will not impact your credit.