The Trump Administration Just Proposed a New Way to Screw Over the States That Supported Him

A new report finds a rule to allow tip pooling will disproportionately hurt workers in red states.

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President Trump has long championed himself as a hero of America’s working class. But, as my colleague Noah Lanard highlighted back in September, Trump’s praise of the American worker is spoiled by how rapidly his Labor Department has pursued policies, like working to roll back overtime eligibility for millions of workers and delaying a requirement that financial advisers actually act in their clients’ best interests, that would further diminish their already-dwindling wages.

And earlier this month, the administration took another step toward making things even worse for low-wage workers with a proposed a rule change that will allow employers to pool the tips their employees earn (think servers at a restaurant) and share them with their untipped coworkers (think cooks and dishwashers). In a press release announcing the rule change, the Department of Labor claims “the proposal would help decrease wage disparities between tipped and non-tipped workers.”

But here’s the rub: The rule doesn’t actually require that employers share those tips with untipped staff. Under the proposal, employers can pocket those tips as long as workers earn the minimum wage. In fact, the Department of Labor all but openly acknowledges that the change could lead to this scenario: “The proposed rule rescinds those portions of the 2011 regulations that restrict employer use of customer tips when the employer pays at least the full Federal minimum wage.”

Now, the Economic Policy Institute (EPI) has a new report that totally debunks the Trump administration’s argument that the move will decrease wage disparities. Far from boosting the stagnating wages of workers, the rule change would in fact clear the path for rampant wage theft in an industry already wracked by the practice, just as worker advocates have warned. According to EPI’s estimates, employers across the country are likely to pocket $5.8 billion worth of employees’ wages if the rule goes through, in addition to an estimated $50 billion in wage theft already occurring nationwide

And, as it turns out, many of the states who stand to lose the most from the change will be those that went for Trump. “The states that have the weakest labor protections tend to be the states that vote Republican in presidential elections,” David Cooper, a senior economic analyst with EPI and co-author of the report, tells Mother Jones. “So this is just another example of the Trump administration’s policies screwing over the very people he claims to be fighting for.”

The EPI researchers clustered states based on the level of protection their laws afford to the earnings of tipped employees. According to their analysis, 28 states fall into what basically translates into the least protective category, meaning they do the poorest job of making sure that employees’ tips make it home with them. These are the states most vulnerable to the rule change. (Some of that vulnerability stems from them falling outside of enforcement guidelines flowing from rulings in the 4th and 10th circuit.) Of the 28 states, 19 broke for Trump in 2016. In 11 of those states—Alabama, Alaska, Arkansas, Idaho, Indiana, Louisiana, Mississippi, Missouri, Nebraska, South Dakota, and Tennessee—Trump won by double digits. EPI estimates that in these 28 states, anywhere from 4.1 percent to 100 percent of tips will be pocketed by employers. In other words, tipped workers across those states could lose between $385 million to $9.6 billion in wages. The EPI’s current prediction, or “preferred estimate”: a staggering 43.91 percent of potentially transferred tips, or $4.2 billion, will be shifted from employees to bosses.


“This is particularly brazen and really disheartening for workers in those states [that voted for Trump],” Cooper says. “If their employer is cheating them, many of these states defer their wage theft enforcement capabilities to the federal government. So if I was in one those states and thought my employer was cheating me, I wouldn’t even have recourse within the state government to seek damages. I’d have to go to the Feds, and what Trump is essentially doing is saying that at the federal level, he’s going to legalize employers stealing from their workers.” 

The rule is currently under consideration, and due to enormous pressure from worker advocates and Democratic lawmakers, is now in the middle of an extended 60 day public comment period.

Image credit: Nerthuz/Getty; BeeBright/Getty

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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