Other Voices: Eatery owners need to keep mitts off of tips

Pooling tips is fine when it shares tips among workers; but restaurant owners shouldn’t take a cut.

By Bloomberg editors

This is the time of year when workers expect even the stingiest boss to show a little heart. A proposal by the U.S. Labor Department, however, would make it easier for millions of restaurant owners to indulge their inner Scrooge.

This month the department served notice that it intends to once again allow the practice of tip-pooling, which has been prohibited since 2011. That’s fine so long as the change is accompanied by a ban on management taking a cut. Diners tip for food and service, not to help owners defray costs.

The numbers aren’t small: There are 4.3 million “tipped” workers in the U.S., 60 percent of whom are in the restaurant sector, and one estimate is that their employers would keep nearly $6 billion of the $36.4 billion in tips they earn each year. The government hasn’t provided its own analysis of the effect of the change.

The case for changing the rule is that tip-pooling can help close the wage gap between “front of the house” workers, such as waiters and bartenders, and “back of the house” employees, such as cooks and dishwashers, who earn far less. Under this new proposal, employers would be allowed to collect and redistribute tips — so long as all employees are paid the federal minimum wage of $7.25. (In a majority of states, employers can pay front-of-the-house workers below the minimum wage, if their tips make up the difference.)

This argument works only if managers actually do redistribute, however. Restaurant owners say that if they had access to tip revenues, they could more easily expand their businesses and hire more workers. That may sound sensible — but it’s hard to argue that the existing ban on tip-pooling has crimped growth in the restaurant industry. The number of new restaurant jobs created in 2017 exceeds those in health care, construction or manufacturing. Job creation in the sector has outpaced the rest of the economy every month for the last seven years.

For restaurant owners that object to restrictions on their ability to collect tips, there’s another option: eliminate tipping altogether. More than 200 restaurants in the U.S. have started building service costs into the prices they charge consumers — giving owners more predictability and control over revenues, which helps offset higher labor costs.

A world without gratuities is still long way off. In the meantime, a common-sense principle should apply: What workers earn should be theirs to keep. That’s no humbug.

The above editorial appears on Bloomberg View.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

A Volunteers of America Western Washington crisis counselor talks with somebody on the phone Thursday, July 28, 2022, in at the VOA Behavioral Health Crisis Call Center in Everett, Washington. (Ryan Berry / The Herald)
Editorial: Dire results will follow end of LGBTQ+ crisis line

The Trump administration will end funding for a 988 line that serves youths in the LGBTQ+ community.

toon
Editorial cartoons for Tuesday, July 8

A sketchy look at the news of the day.… Continue reading

Comment: Students can thrive if we lock up their phones

There’s plenty of research proving the value of phone bans. The biggest hurdle has been parents.

Dowd: A lesson from amicable Founding Foes Adams and Jefferson

A new exhibit on the two founders has advice as we near the nation’s 250th birthday in the age of Trump.

GOP priorities are not pro-life, or pro-Christian

The Republican Party has long branded itself as the pro-life, pro-Christian party.… Continue reading

Was Republicans’ BBB just socialism for the ultra-rich?

It seems to this reader that the recently passed spending and tax… Continue reading

Comment: $100 billion for ICE just asks for waste, fraud, abuse

It will expand its holding facilities, more than double its agents and ensnare immigrants and citizens alike.

toon
Editorial: Using discourse to get to common ground

A Building Bridges panel discussion heard from lawmakers and students on disagreeing agreeably.

Senate Minority Leader Chuck Schumer (D-N.Y.) speaks during a news conference at the U.S. Capitol on Friday, June 27, 2025. The sweeping measure Senate Republican leaders hope to push through has many unpopular elements that they despise. But they face a political reckoning on taxes and the scorn of the president if they fail to pass it. (Kent Nishimura/The New York Times)
Editorial: GOP should heed all-caps message on tax policy bill

Trading cuts to Medicaid and more for tax cuts for the wealthy may have consequences for Republicans.

Alaina Livingston, a 4th grade teacher at Silver Furs Elementary, receives her Johnson & Johnson COVID-19 vaccine at a vaccination clinic for Everett School District teachers and staff at Evergreen Middle School on Saturday, March 6, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Editorial: RFK Jr., CDC panel pose threat to vaccine access

Pharmacies following newly changed CDC guidelines may restrict access to vaccines for some patients.

toon
Editorial cartoons for Monday, July 7

A sketchy look at the news of the day.… Continue reading

Comment: Supreme Court’s majority is picking its battles

If a constitutional crisis with Trump must happen, the chief justice wants it on his terms.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.