MEMPHIS, Tenn. — Mid-South Senator Lee Harris is seeking local input on a Department of Labor proposal to change the way tips are paid out.
Right now, an employer can either pay servers minimum wage plus tips or take a tip credit – meaning they pay less than minimum wage and tips make up the difference.
Under the new proposal, a restaurant could implement tip pooling, so all of the tips go into one jar and are dispersed among everyone – including back-of-the-house employees like cooks and dishwashers.
This new proposal from the Department of Labor under the Fair Labor Standards Act would only apply to those employers already paying the full minimum wage.
“The proposal would help decrease wage disparities between tipped and non-tipped workers – an option that is currently restricted by a rule promulgated in 2011 that has been challenged in a number of courts,” the Department said in a news release.
Read: Tip Regulations Under the Fair Labor Standards Act
But some, including Sen. Harris, worry that the money won’t always go to those employees.
“Under the proposed rule, employers would have broad discretion over the tips earned by their employees, allowing them to keep wages for themselves or the business.”
“It’s important to me to get a local perspective as to how this might affect people’s bottom line,” he added. “I’m not sure that servers know that this proposed change could become a reality and I’m seeking their input.”
Sen. Harris plans to be at Stein’s restaurant located at 2248 South Lauderdale Street Friday, January 19 at 12:30 p.m. to hear from the local community.
If you cannot attend, you can submit a formal comment to the Department of Labor here.