The Department of Labor, which thrives on telling private industry how to fashion their business models, has just published a new final rule aimed at restaurants and waiters. The Wall St Journal reports that, “In April, the Labor Department amended the regulations in the Fair Labor Standards Act to state that restaurant owners now have to explain to each employee, in detail, the exact amount of tips that will be credited toward the minimum wage.”
Is compliance even possible (or feasible)? Can a restaurant owner, or anyone for that matter, know with precise detail the EXACT amount of tips to be credited toward the minimum wage (which is now $7.25/hr)? I’ve worked as a server before and tips can vary wildly. It’s impossible to know with any certainty how much cash a single server might rake in on any given night, much less a whole restaurant full of servers. Now, restaurant owners will divert attention from their business to hold daily “tip” meetings with servers explaining, in detail, that some portion of tips will be credited toward their min wage - information they probably knew anyway.
Failure to comply will cost owners up to $1,100 for each violation plus the potential for criminal penalties. This is craziness. The DOL has dreamt up a new rule, which carries the same effect as law that will only serve to hurt restaurant owners and ultimately servers. Let’s add the DOL to the list of federal departments that have outlived their purpose and need a trip to the scrap pile.