BOSTON – Attorney General Maura Healey earlier this week praised the U.S. Department of Labor’s new Tip Regulation, ending a lawsuit that was filed by nine attorneys general and ending the fight to overturn the Trump Administration’s rule.
For decades, tipped workers had been protected by USDOL guidance that said they could not legally be paid the lower tipped minimum wage rate if more than 20 percent of their work time was spent doing non-tipped work. The USDOL rule enacted by the Trump Administration eliminated this guidance and allowed employers to assign non-tipped work such as preparing food, setting tables, and cleaning to tipped employees while still taking a tip credit. As such, the rule allowed employers to spread thin tips and lower servers’ average incomes. In January 2021, AG Healey joined a coalition of attorneys general in legally challenging the Trump-era rule.
“All this rule did was make it more difficult for workers to earn a living wage in the midst of an economic crisis – it was illegal and cruel for so many struggling to get by during the pandemic,” said AG Healey. “We welcome the Department of Labor’s new workplace protections and will continue to advocate for the fair treatment and protection of tipped employees.”
The Fair Labor Standards Act is the federal law establishing a baseline of critical workplace protections, such as minimum wage and overtime, for workers across the country. It permits employers to take a credit against their minimum wage obligations for the tips workers receive. The Trump-era rule would have eliminated a 20 percent cap on the amount of non-tipped work a tipped worker could do and still receive only the tipped minimum wage, resulting in lower pay for tipped workers nationwide. The minimum wage rate for tipped workers in Massachusetts is $5.55 per hour, as long as their tips bring their earnings up to $13.50 per hour.
As the coalition advocated, the new rule restores the 20 percent cap and imposes an additional limit of 30 consecutive minutes of non-tipped work. In addition, it provides helpful, clarifying definitions for tipped work, non-tipped work, and work that does not generate tips itself but directly supports tipped work. As a result, tipped workers can only be paid the tipped minimum wage when the vast majority of their work generates tips, helping to protect them from exploitation and wage theft.
The effort was co-led by attorneys general of Pennsylvania and Illinois and joined by AG Healey, along with the attorneys general from Delaware, the District of Columbia, Maryland, Michigan, New Jersey and New York.