ILLINOIS (WAND) - Illinois Attorney General Kwame Raoul is part of a lawsuit looking to protect tipped workers from what he called a federal effort to "transport employees' tips to their employers."
In December, the U.S. Department of Labor announced a final rule for tip regulations under the Fair Labor Standards Act. Raoul's office one of their decisions eliminates the 80/20 rule, which caps the amount of time a tipped employee can spend on non-tipped, related duties to 20 percent.
This is significant when the federal minimum wage ($7.25) and Illinois minimum wage ($11) are considered. Employers have the option of paying a lower wage of $2.83 and taking a credit for the difference with tips earned by employees. With the 80/20 rule on the way out, employers can give employees more non-tipped work while still taking the tip credit.
The coalition involved in the lawsuit argued the rule is a contradiction of the "text and purpose" of the Fair Labor Standards Act (FLSA). They argued the Department of Labor violated rulemaking process requirements and failed the analyze the impact of the rule change on tipped workers. They also claimed the department failed to justify its departure from the 80/20 rule and said the new rule will cause harm to states by lowering income tax revenue, increasing public benefits expenditures and imposing administrative costs.
“The Department of Labor’s attempt to transfer employees’ tips to their employers would harm thousands of workers who already earn low wages,” Raoul said. “While I understand that many businesses are struggling due to the COVID-19 pandemic, relief should not come at the expense of workers. I will continue to defend against any effort to eliminate rules that protect workers from wage theft and other unfair employment practices.”
A press release from the Department of Labor talked about what changes have been made and reasoning for them. Click here to read it.
“This final rule provides clarity and flexibility for employers and could increase pay for back-of-the house workers, like cooks and dishwashers, who have been excluded from participating in tip pools in the past,” said U.S. Department of Labor Wage and Hour Administrator Cheryl Stanton. “Newly allowed tip sharing may incentivize the inclusion of these previously excluded workers and reduce wage disparities among all workers who contribute to customers’ experience.”
The Department of Labor said the final rule would go into effect 60 days after its publication in the Federal Register.
Raoul and Pennsylvania Attorney General Josh Shapiro were joined by attorneys general from Delaware, the District of Columbia, Maryland, Massachusetts, Michigan, New Jersey and New York in the lawsuit.
