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Department of Labor's Inspector General Launches Tip Pool Probe


Earlier this week, it was announced that the Department of Labor's Inspector General will launch a probe into claims that the Department of Labor withheld an analysis that showed a proposed tip pool rule could actually cost tipped workers billions of dollars.  Readers might remember that back in December, the Department of Labor announced a proposed rule that would allow employers to distribute servers' tips to back of the house employees.  However, Democrats and many pro-employee groups were quick to criticize this proposed rule as a power grab by employers and an improper attempt to take money from hourly workers, due in part to to the widespread wage theft that occurs in the restaurant industry and concern that employers would actually pocket the tips instead rather than distributing them.

The announcement that the Department of Labor's Inspector General intends to conduct a probe comes on the heels of a report that the Department of Labor shelved an economic analysis which was critical of this proposed tip pool rule.  Allegations have arisen that senior Department of Labor officials ordered Department of Labor staff to revise the data methodology to lessen the negative impact that could result from the new tip pool rule.  In doing so, the Department of Labor sought to make the tip pool rule appear more benign than what it may actually be.

At this point, it is hard to say what the investigation will reveal and whether the information that was suppressed will actually prevent the tip pool rule from taking effect.  Regardless, it certainly places the Department of Labor in an untenable light, if the suppression of information turns out to be true and detrimental to the proposed tip pool rule.



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