CPR Letter Calls On Trump Labor Department to Withdraw Tipping Rule Proposal Due to Suppressed Analysis

by Katie Tracy

February 05, 2018

Today, six CPR Member Scholars and staff members sent a letter to the Department of Labor's (DOL) Wage and Hour Division, calling on the agency to withdraw its proposal to repeal an Obama-era rule aimed at preventing employers from taking workers' hard-earned tips. Last week, Bloomberg Law uncovered a deliberate effort by the DOL to conceal an analysis showing that the proposal would allow business owners and managers to steal and misappropriate billions of dollars – that's "billions" with a "b" – of tips from workers. This theft would be especially devastating for the thousands of restaurant workers and bartenders whose tips represent the vast majority of their take-home pay. 

According to the Bloomberg Law article, DOL leadership balked at the original cost-benefit analysis that career staff had produced because it showed precisely what worker advocates claimed it would: This attack against a sensible safeguard could result in the transfer of billions of dollars from hard-working Americans to their bosses. Initially, DOL responded by demanding that staff rework the cost-benefit analysis until it produced a more politically palatable result. As malleable as cost-benefit analysis is, the career staff were never able to satisfy the demands of DOL leadership, and eventually leadership simply abandoned the effort, buried the damning analyses, and proceeded as though it had never seen them. 

The timing of Bloomberg Law's discovery of this malfeasance on the part of the DOL is especially noteworthy as it came just days before the end of the comment period (11:59 p.m. Eastern time today, Feb. 5). Because this information was concealed until the last minute, the public has been deprived of its right to meaningfully participate in the rulemaking process as required by law. Our comment letter notes: 

The DOL's apparent cover-up defeats the principle of meaningful public participation in the rulemaking process, which is a central pillar of our system of administrative law. By denying the public complete and relevant information on which to assess the proposed Tip Pooling Rule, the DOL has inhibited the public's ability to provide it with meaningful feedback as part of the notice-and-comment process. 

The comment letter concludes by calling on the DOL to immediately withdraw the proposal. Failing that, it calls on the agency to formally release the original cost-benefit analysis and allow the public at least 120 days to review and comment on that analysis. 

Signing the letter with me are CPR Member Scholars Tom McGarity, Sid Shapiro, Amy Sinden, and Rena Steinzor, and CPR Senior Policy Analyst James Goodwin. 

A copy of the comment letter is available on CPR's website.

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Katie Tracy, J.D., joined CPR as a workers’ rights policy analyst in May 2015. Her previous experience includes working for more than two years as a regulatory policy analyst at the Center for Effective Government, where she advocated for strong regulations to protect health, safety, and the environment.

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