Democrats to Probe Labor Department on Tips, Child Labor

House Democrats plan to use their new majority to bring Labor Department officials in for hearings on a botched regulation for tipped workers and a move to allow teenagers to work in health care jobs, Rep. Bobby Scott (D-Va.) told Bloomberg Law Nov. 7.

“If you’re having a regulatory change, the law requires you to produce the evidence to support the change,” Scott, the top Democrat on the House Education and the Workforce Committee, said. Democrats on the panel “would like to see” what the Labor Department “is looking at” to support the moves, he said.

The department came under fire in February when Bloomberg Law reported that DOL proposed a “tip pool” regulation without telling the public about an internal analysis showing the rule could allow companies to skim more than $600 million in gratuities from their workers each year. Office of Management and Budget Director Mick Mulvaney and Labor Secretary Alexander Acosta overruled the government’s regulatory clearinghouse in order to scrap the analysis before issuing the proposed rule for public notice and comment.

Democrats also have raised safety concerns about a rule that would allow teenagers to work in certain health-care jobs. They say the move would expose child workers to hazardous equipment, like machine-operated patient lifts.

Scott’s comments came as Democrats think about how to use their new control of the House to rein in the Trump administration. Scott, who’s expected to chair the committee next year, said he also wants to look at the National Labor Relations Board’s upcoming regulation to limit “joint employer liability” for businesses in staffing, franchise, and other contractual relationships.

“The Department of Labor will continue to engage with members of Congress, including committees of jurisdiction, to create more opportunities for Americans to access good, family-sustaining jobs,” a DOL spokeswoman told Bloomberg Law.

DOL: Congress’s Job to Address Tip Skimming

Acosta, who was grilled about the scrapped analysis during a House hearing, told lawmakers that the department didn’t have the authority to ban managers from participating in tip pools. Congress later used a spending bill to amend federal wage and hour law to close a loophole allowing managers and supervisors to participate in tip sharing arrangement.

The proposed rule was designed to make it easier for restaurants and other businesses to implement tip-sharing arrangements among workers who directly earn gratuities and those who don’t. The department said the regulation would bolster pay for some low-wage workers who don’t traditionally earn tips, such as dishwashers.

The regulation would have applied only to tipped workers who are paid at least the full federal minimum wage ($7.25 per hour), rather than the lower tipped minimum wage ($2.13 per hour) allowed under federal law.

The DOL says the child work rule would give teenagers valuable on-the-job training and fill much needed health care positions.