This past Tuesday, 19 Attorneys General including Pennsylvania AG Josh Shapiro submitted a letter to the Department of Labor protesting a proposal that would rescind protections for tipped workers. The proposal would eliminate the "80/20 rule" - a requirement that workers being paid $2.83 per hour should spend at least 80% of their time doing work that they will receive tips for.
If this proposal is brought into law, there is a fear that employers would abuse being able to assign unlimited amounts of non-tipped work – such as cleaning, cooking, and other “back of the house” tasks while paying their employees below minimum wage and depriving them of tips.
Under the Fair Labor Standards Act, employers are required to pay their employees the federal minimum wage. Pennsylvania employers can also meet this requirement by paying a lower cash wage, no less than $2.83 per hour, and take a credit for the difference with the tips that employees earn. This is known as the “tip credit.”
AG Shapiro is concerned the proposed rule would “further erode wages for hundreds of thousands of Pennsylvania workers that rely on tips to make a living,” said Attorney General Josh Shapiro. “We’re keeping up the fight to ensure workers get the wages they’ve earned, they deserve, and they rely on to support themselves and their families.”
“Tips are the only way that most service workers can earn a living wage in Massachusetts,” said AG Healey of Massachusetts. “This proposed change by USDOL would be harmful for tipped workers and their families by driving down their take home pay.”
“The Department of Labor’s attempt to eliminate the 80/20 rule would harm thousands of workers throughout Illinois,” Attorney General Raoul of Illinois said. “Eliminating this rule would not only hurt employees who rely on tips as their income, but it would also put them at risk of wage theft and other unfair labor practices. I urge the Department of Labor to protect employees and reconsider this proposal.”
The coalition's letter to the Department of Labor argues that the proposal is contrary to the purpose of the Fair Labor Standards Act – to protect workers – and that DOL did not abide by the requirements of the Administrative Procedure Act, claiming that it failed to examine the proposal’s impact on wages and increased reliance on social safety net programs.
Along with Pennsylvania, Illinois, and Massachusetts, the comment letter sent to the Department of Labor on Tuesday was filed by the Attorneys General of California, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.