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Here's a tip: Restaurants can keep the status quo

By Justin Katz

Sometimes the morning papers arrive, and a practical reader can't help but wonder what perspective makes something newsworthy. That was my reaction to a big front-page article in a Newport Daily News article by Sean Flynn (“Tipped Off: Potential new tip rules have servers steamed,” Feb. 24, 2018). The story is that the Trump administration is undoing an Obama-era power grab whereby the federal government dictates rules for tipping in every restaurant across the country.

After an opening paragraph stating the most extreme interpretation of the proposed change, Flynn spent nine paragraphs quoting local waitstaff who strongly oppose it. “The proposal is kind of disgusting,” says Schae Williams of Blue Plate Diner.

If a reader is interested enough to wade through all of that and turn to page A10, he or she will learn: “The proposed rule just reverses an Obamaera rule that prohibited employers from setting up tip-pooling arrangements that include employees who are not customarily tipped, such as dishwashers and cooks.”

Importantly, “nothing in the rule change would require the employers to actually redistribute all the tips.” The complaint of those who oppose the Trump administration plan is that it “would leave the matter up to the 50 individual states whether or not to enforce such a law.” Then we get more paragraphs of the opposition's arguments and lamentations.

At no point does the article mention that Rhode Island has already been primed to take the position that these servers want. In 2012, the Rhode Island House passed legislation that would ban employer tip collection and tip pooling. That bill didn't get through the Senate, but the Obama administration had already acted, so it couldn't have been a priority at the state level.

So here is what the Trump administration is suggesting: Employees who work for particular restaurants will be able to negotiate a tipping system that works for them. If a state finds that the balance of power favors one side or the other in those negotiations, it can regulate the matter at the state level. The only difference is that distant politicians in Washington, D.C., won't be telling the whole country what to do.

If you find that “kind of disgusting,” I can only ask: Why do you feel so threatened by others' freedom? Nothing in the rule change would require any change to the way restaurants handle tips. As the article illustrates with quotes from restaurant managers who support servers' keeping their tips, the status quo - which was the status quo even before Obama's power grab - would remain in place. Regulations could be imposed at the state level, if that's what Rhode Island wants, and individual businesses could figure out what works for them.

If skimming or pooling tips really bites into the income of servers, then restaurants that do it won't keep their servers unless they've got some really good reasons for the policy and employees find it works in their favor, too.

Rhode Islanders used to understand that one-size-fitsall arrangements don't tend to work for an entire country. What happened to that wisdom?

Justin Katz is Research Director for the RI Center for Freedom & Prosperity and editor of

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