In a victory for restaurant workers, the new budget bill includes a provision that protects tips


After considering a veto that would have led to a government shutdown, President Donald Trump signed into law an omnibus budget bill on Friday afternoon.

In a press conference, Trump said the 2,232-page document places heavy focus on the military and allocates nearly $1.6 billion funds for border security. But most immediately relevant for the restaurant industry is a provision, on page 2,025, that will offer new protections for tipped restaurant workers — which are most servers in the United States.

The bill updates the Fair Labor and Standards Act to include key protections of worker tips:

An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.

Violators will be fined up to $1,100 for each violation, are liable for the stolen tips and may be liable for damages as well.

Today’s law nullifies a rule proposed by the Department of Labor in December that would have allowed managers and owners of restaurants where workers are paid a minimum wage to collect their tips and redistribute them — or pocket them. The proposed rule, which initially was posted with only a brief 30-day comment period, caused an uproar among restaurant workers and labor advocates, most notably the Restaurant Opportunities Center United. Approximately 350,000 people commented, while some testified on Capital Hill or joined demonstrations in front of U.S. Labor Department buildings around the country.

Saru Jayaraman, co-founder and president of the ROC, declared this a victory. In a phone interview, she called the decision “unbelievably historic,” adding that “it shows the power of worker organizing.” The impact comes after six intense months of advocating and more recently negotiating. “We’ve been working on it non-stop,” she said.

The bill doesn’t prohibit tip pooling in establishments where the minimum wage is paid to all. This is notable as it may help close the sizable pay gap between those who work in the front of house and those who work in kitchens. Most restaurants continue to follow the tipped-minimum wage, where servers are paid as little as $2.13 per hour.

While the bill offers protections to restaurant workers from management, advocates like Jayaraman are still pushing for One Fair Wage, a movement that would afford all restaurant workers a fair wage and allow them to be less dependent upon tipping, which has been linked to sexual harassment. Currently, this is in effect in California and six other states.