You’re at a restaurant, you’ve finished your meal and the bill has arrived. You look at the total — and do some math in your head if the suggested tip percentages aren’t listed — and decide how much you’re going to tip the server.
The decision on how much to tip — or whether to tip at all, since it is voluntary — is based almost entirely on the server’s performance: Did they get the order right? Did they check to see if the food was to your satisfaction? Did they keep your water/beverage glass full? Was the server friendly and courteous?
We pose these questions in our heads because we know that the tip is going to the server, not the restaurant. The federal Labor Department seems to think that it’s the restaurant owner, not the server, who should have control of the tips.
In December, President Donald Trump’s administration announced a proposal to undo portions of a 2011 regulation that blocked employers from collecting tips and distributing them to anyone other than the workers who customarily receive them, the New York Times reported Feb. 4.
Under the new proposal, for which the public comment period ended Feb. 5, employers could use workers’ tips for essentially any purpose, as long as the workers were directly paid at least the federal minimum wage of $7.25 an hour.
The restaurant industry, which fought President Barack Obama administration’s regulation for years, argues that the change would allow employers to share the tips of waiters and waitresses with so-called back-of-the-house workers like cooks and dishwashers.
This next question is for every Journal Times reader who ever waited tables: It was made clear to you on your first day at the restaurant that you were expected to give a portion of your tip money to the busboys, right?
Labor advocacy groups and former Obama administration officials argue that the regulation would legalize a vast income transfer from workers to employers, who would be permitted to pocket the tips.
A study by the Economic Policy Institute, a left-leaning think tank, estimated that the change would cost current tipped workers $5.8 billion a year in pay. It cast doubt on the idea that employers would use the money to compensate other workers better.
Heidi Shierholz, a former chief economist at the Labor Department who oversaw the study, said that under standard economic theory, employers were unlikely to pay workers more than needed to attract and retain them, which they are by definition already doing in most cases. She predicted that if the regulation took effect and employers decided to share tips with these workers, “their base pay would be reduced and there would be no more take-home pay.”
If restaurant owners want to give more money to their non-server employees, they should feel free to raise the wages of those employees.
The bill covers what is owed the owner of the restaurant. The tip — which, once again, is voluntary — belongs to the server and is for her or him to share as they see fit. That’s the free market at work.
The Labor Department shouldn’t enact policy to the contrary.