Labor Department accused of burying data

Labor advocates are calling on the U.S. Department of Labor to withdraw a proposed rule regarding how restaurants divvy up tips amid allegations the federal agency scrapped an internal analysis showing workers stood to lose billions in gratuities.

The Labor Department in December proposed rolling back Obama-era regulations that banned tip pooling, or the distribution of gratuities to anyone other than the front-of-house staff who earned them.   

The agency removed an analysis from that proposal that showed the plan could cause workers to lose billions in tips, according to a Bloomberg Law story published Thursday, citing four current and former Labor Department sources.

Labor Secretary Alexander Acosta and his team reportedly did not agree with assumptions in the analysis that employers would keep the gratuities of workers, rather than distribute the pooled tips to other hours workers.

Asked for comment, a Labor Department spokesperson said the federal agency "welcomes comments that provide data or information regarding the potential benefits and transfers of this proposed rule." 

After the public commentary period ends, the department "intends to publish an informed cost benefit analysis as part of any final rule," the DOL spokesperson said. 

The agency offered the proposal without providing an estimate of how much would be shifted from workers to employers under the new rule. The Economic Policy Institute, a liberal-leaning research firm, projected that the rule would cost servers $5.8 billion a year.

"There is no way to do a good face estimate and maintain the fiction that this rule isn't terrible for workers," said Heidi Shierholz, who previously served as chief economist for the Labor Department, in a conference call on Thursday arranged by EPI.

Some labor experts contend the proposal would let restaurant owners and managers take part in the tipping pools, effectively taking some of the money for themselves.

"If this rule takes effect, employers will legally be able to pocket workers tips," said Jared Bernstein, Senior Fellow at the Center on Budget and Policy, who added that tips are one means that low-wage workers get by.

Workers and businesses have until Monday to weigh in on the tip pool proposal. But at least one lawmaker is calling on the Trump administration to withdraw it.

Senator Patty Murray, a Democrat from Washington State, in a tweet Thursday called on Acosta to withdraw the proposal in light of the Bloomberg Law report.