Donald Trump’s White House made a huge announcement this week when it revealed that it is rolling back an Obama-era rule that bans employers from pooling workers’ tips.
The Hill reported that Trump’s Department of Labor announced on Monday that it plans to issue a proposed rule to change the Fair Labor Standards Act regulation and allow employers to pool the tips of workers who make full minimum wage and share them with non-tipped workers. The National Restaurant Association has long been fighting for the rule change in order to eliminate what it has said is a pay disparity between servers in the front of the house and staff in the kitchen.
“These ‘back of the house’ employees contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers,” the Labor Department said in a press release. It added that the proposed rule would not affect employees who make less than the minimum wage and earn tips to supplement their pay, also known as tip credit.
Worker advocates are against the rule change, saying that it could allow employers to do whatever they wanted with the tips — including taking a cut themselves.
This comes as Obama is continuing to travel the world bashing Trump wherever he goes. While appearing in India a few days before the France speech, Obama slammed the “destructive populism from the left or the right” that he called a threat to modern democracy.
“The thing I love about America and I suspect the thing you love about India is just this cacophony of life and it throws up all kinds of variety,” Obama said in response to a question about Trump. “There are political trends in America that I don’t agree with and abide by but I recognise as part of a running thread in American life.”
Obama went on to say that he has become “obsessed” with the way news is handled and consumed, particularly by the young.
“We are more connected than ever before but … more and more we are fitting facts to suit our opinions rather than formulating our opinions based on facts,” said Obama. “This poses a great danger because democracies can’t function if we can’t agree on a basic baseline of what is true and what is false.”
When the Labor Department first signaled in the semi-annual regulatory agenda that it was changing the rule, worker advocates argued it could allow employers to do whatever they wanted with the tips — including taking a cut themselves.
The public will have 30 days to comment on the proposed rule once its published in the Federal Register.
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