Proposed rule could change the way tipped employees are paid


WILMINGTON, NC (WWAY) — There is a proposed rule by the U.S. Department of Labor that could push back the Obama-era 80/20 rule when it comes to tipping employees.

If approved, the new rule would create a shared tip pool for the front and back-of-house staff.

- Advertisement -

“The [front-of-house] wages are comprised by tips, but, if the employees were working in certain situations that was not tipped, the employers were obliged to pay tips to them,” Christian Beer, an Economics Instructor at Cape Fear Community College said. “There was a lot of controversy and lawsuits because many employees were saying that they were not being paid fair.”

He says the proposed rule would allow the pool to be shared among all workers except the employer and manager to compensate for tasks where servers didn’t receive tips.

“You could work a little bit earlier… let’s say cleaning your area and this will be deemed as a tipped part of your work [under the new rules],” Beer said. 

Michael Cunningham, a server at “The Basics” in downtown Wilmington is not a fan of the idea.

“As a front of the house server, we make $2.13 an hour and the back-of-the-house fluctuates between at least between $11, $15 and even higher for some, so we’d have to figure that part out of equal wages,” Cunningham said.’

But, Beer says the rule will allow employers to adjust wages.

“With the new rule, wages now can drop and the employer can compensate that with the tipping rule,” Beer said.

Beer says restaurants are the easiest way of understanding this proposed rule, but it would apply to all service industries.

When WWAY asked Thomas Crossland, a barber at City Kutz barbershop in downtown Wilmington, his thoughts on the ruling, he was was on the same page as Cunningham.

“I feel like if I perform the service then I shouldn’t have to split my tips,” Crossland said.

Beer says, with any policy, there will be winners and losers, but, as it was written, it does not address gender pay differences.

The proposal is open for public comment and review for 60 days.