Dive Brief:
- After grilling U.S. Department of Labor (DOL) Secretary Alex Acosta on the tip pooling analysis his department reportedly scrapped, Rep. Rosa DeLauro (D-CT) has introduced a bill in the House that would amend the Fair Labor Standards Act (FLSA) to include "protections for employees receiving tips."
- During a March 6 budget hearing by the Committee on Appropriations to discuss 2019 funding for DOL, some of the questions (many from DeLauro) concerned the department's handling of the tip pooling regulations, but Acosta largely dodged them.
- Acosta did state that he would support measures that would make it illegal for employers to pocket tips — the main concern employee groups have raised about DOL's plan to rescind the Obama-era rules. Some bipartisan support exists for an appropriations addendum that would address the issue, Bloomberg Law reports.
Dive Insight:
While action from Congress on the issue could be slow, the pressure on DOL regarding tip pooling has increased as of late. After reports revealed that DOL may have scrapped negative internal analysis of the tip pooling changes the department proposed in December, the agency's inspector general initiated an audit of the rulemaking process.
Nationally, the issue remains unresolved partly thanks to the 10th U.S. Circuit Court of Appeals ruling that the 2011 tip pooling regulations adopted by the Obama administration — which said tips could not be redistributed to nontipped employees even if the employer does not take a tip credit — were an overreach. At least one other court disagrees on the subject, and a petition to the U.S. Supreme Court on the matter is pending.
Overall, the future of current tip pooling regulations remains in limbo. Attempts by DOL to rescind the 2011 regulations may slow due to the audit, and it is unclear whether the Supreme Court will take up the issue at all.
