Nation’s Restaurant News: Labor Department to Rescind Tip-Pooling Restrictions
Nation’s Restaurant News: Labor Department to Rescind Tip-Pooling Restrictions

The move will allow restaurants to divide tips between front and back-of-house staff members.

A controversial regulation preventing restaurants from pooling tips is likely to be rescinded by the federal government. According to a recent article in Nation’s Restaurant News, the U.S. Department of Labor published a notice that intends to take away the rule that was originally put in place under the Obama administration in 2011.

Under the Fair Labor Standards Act, restaurants are able to pay wait staff a lower wage as long as their tips make up the difference. Restaurants who don’t offer that tip credit have been able to take tips and pool them, which are then shared with the back-of-house staff. Ultimately, tip pooling is designed to make pay fair across a restaurant’s entire staff. That’s why this decision by the federal government is considered to be a big win for its advocates.

“By all means, this is a huge victory for us. This is a great development,” said Angelo Amador, executive director of the National Restaurant Association’s Restaurant Law Center, in an interview with Nation’s Restaurant News. However, he later added that the organization plans to continue litigating to settle the issue and eliminate any confusion. He said, “We want to prevent this is three years down the line a different labor secretary decides to give it another try. We want the Supreme Court to decide.”

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