New Labor Department Rule Could Change Service Industries Tip Out

This year has been difficult for local restaurants.

Now, a new rule from the Labor Department could make this more difficult for industry workers.

The Labor Department announced a rule that allows employers to require tipped workers like servers and bartenders to tip back of house employees.

This rule would take almost $700 million annually from service industry workers, CBS says.

One Traverse City server, Melanie Vega says, “There are people who actually have to hustle and have two or three serving gigs in order to just make ends meet and I don’t think that it’s fair that most people bust their butts to make their money and they have to split some of that.”

She had to walk away from her job because she just wasn’t making enough money.

She says it disappointing to see more being taken away from employee who are already suffering.

Vega says, “I just think about how it effect the entire trifecta of the workers in that environment because you don’t see managers tipping out their servers because of the hours they work.”

Luckily, the Michigan Restaurant and Lodging Association says Michigan won’t be too affected.

Michigan Restaurant and Lodging Association’s president and CEO, Justin Winslow says, “I say it’s irrelevant to Michigan mostly because most restaurants who have full service who have tipped employees do pay a lower tip minimum wage.”

He says this rule actually helps to make pay more equitable.0cfc0cf8 4f47 4bbb B22e D8c7c28f2a3c

“For states that already meet that full  minimum wage it’s that the employer is capable of redistributing that wealth a little bit more equitably across the entire restaurant,” said Winslow.

But Melanie Vega says for many people in the industry, this just wasn’t the right time.

Vega says, “It just seems like it could have been done at a different time at least. Or if it was going to introduced there should have been the idea before the implementation.”

To learn more about the Labor Department’s new rule on tipping, click here.