Attorney General Becerra Pushes Back Against Federal Proposal Threatening Worker Tips

SACRAMENTO – California Attorney General Xavier Becerra today announced joining a coalition of 19 attorneys general in a comment letter opposing a federal proposal that threatens to rob workers of tips that make up a substantial portion of their wages. Currently, employees who receive less than the minimum wage can only be assigned to do non-tip-generating work 20 percent of the time, under the assumption that their tips will allow them to earn at least the federal minimum wage. Under the proposal, the U.S. Department of Labor (DOL) is attempting to repeal that limit, which could result in wage theft and deprive tipped workers nationwide of millions of dollars of wages.

“This proposed rule is a blatant attempt to steal from the poor and give to the rich,” said Attorney General Becerra. “Everyone deserves to be able to earn a decent, living wage. Instead, the Trump Administration is threatening to rob people of their tips. While the Trump Administration retreats on worker rights, states across the country are stepping up to protect workers who form the foundation of our economy.”

Even though tip credits that allow employers to pay less than minimum wage are unlawful in California, the state has a strong interest in protecting a regulatory framework that upholds the rights of workers across the country. DOL’s proposal would effectively repeal the federal 80/20 rule, which prohibits employers from requiring workers who earn subminimum wages of $2.13 per hour to spend more than 20 percent of their time on tasks that do not generate tips. As a result of the proposed rule, employers would be able to excessively assign workers tasks that do not generate tips while paying them a subminimum wage of $2.13 per hour. For instance, instead of waiting tables at least 80 percent of the time, a server at a restaurant could be required to spend more time on non-tipped tasks like cleaning and setting tables, toasting bread, making coffee, and occasionally washing dishes for subminimum wages. Under the 80/20 rule, tips are meant to account for the gap between the federal minimum wage of $7.25 per hour and a worker’s subminimum wages. DOL’s proposal would not only affect people in the restaurant and food service industries, but also people who make tips in a wide range of occupations, such as workers at nail salons or car washes.

Attorney General Becerra is committed to fighting for the rights of workers in California and across the country. Last year, Attorney General Becerra co-led a coalition of attorneys general in opposition to a proposed rule that threatened to force workers to share their tips with their employers. Last month, the Attorney General called on the Federal Trade Commission to ban non-compete agreements, which can prevent employees from seeking better pay and benefits by going to work for a competitor. Attorney General Becerra has also actively sought to tackle anticompetitive practices and, among other actions, has led lawsuits against T-Mobile, Sutter Health, and Valero to protect consumers in the marketplace.

In submitting the comment letter, Attorney General Becerra joins the attorneys general of Illinois, Massachusetts, Pennsylvania, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.

A copy of the comment letter is available here.