How a federal proposal could affect millions of dollars in Texas workers' tips

[TexasTowelie]

by Sydney Greene, Texas Tribune


A U.S. Department of Labor proposal that could change how workers in Texas and the rest of the nation receive tips is facing greater scrutiny after a report revealed the department withheld an unfavorable economic analysis.

Released last December, the proposal would give employers greater freedom to decide where their employees' tips go. Businesses like restaurants could share "front of the house" workers' tips with “back of the house” workers, such as dishwashers and cooks, or they could pocket employees' tips for themselves. The proposal would only apply to employers who pay a full minimum wage of $7.25. The Trump administration has said the plan is an attempt to help decrease wage disparities between tipped and non-tipped workers.

But a Bloomberg BNA article says that Labor Department leaders scrapped an economic analysis of the proposal that revealed workers could lose billions of dollars under the new tip proposal.

Under the plan, Texas could see $676.3 million of tips transferred from employees to employers' pockets in a year, according to the Economic Policy Institute, a left-leaning think tank. But Texas groups disagree on the estimated impact of the proposal.

Read more: https://www.texastribune.org/2018/02/01/texas-workers-tips-millions-dollars-employers/

[Blindingly apparent]

1. Ive been trying to understand this since first time reported

Wait staff have to pay 10% of total sales to IRS whether they are tipped or not. If tips are considered earned income how can anyone make them share even part of it. Does this mean cooks and dishwashers will be also owe the tax? Will all workers split the 10% tax? Does anyone believe that employers will pay their share of the tax? This whole issue seems decidedly corrupt.