Restaurant managers in Nevada could divvy up tips under new proposal

Paul Sancya / AP

As a city full of bartenders, servers and dealers, Las Vegas takes tipping seriously. That’s why a proposed new federal rule that would allow more tip pooling has some in the hospitality industry on edge.

The U.S. Department of Labor wants to allow restaurants, bars and other establishments to require sharing of tips among tipped “front of house” employees, such as servers and bartenders, and those who work “back of house,” such as cooks and dishwashers. If passed, the rule could cut into the earnings of front of house workers who rely heavily on tips, said Brittany Bronson, a former longtime server and hospitality worker in Las Vegas.

“As a server, my first reaction when I was serving would be, ‘Oh, my gosh, this is going to cost me a lot of money,’ ” said Bronson, who has worked both on and off the Strip. “But obviously, it depends on how each manager establishes the practice.”

Under Nevada law, tipped employees must receive an hourly pay of at least the minimum wage on top of their tip earnings, unlike the vast majority of states. For that reason, a significant portion of the proposal—eliminating an existing limit on how much time a subminimum wage employee can spend on non-tipped duties—would not affect the restaurant industry here.

Nonetheless, the Culinary Union denounced the change and is worried it could hurt workers in states where employers can pay a subminimum wage, said Culinary Union secretary-treasurer Geoconda Arguello-Kline.

“The Culinary Union opposes this shortsighted and anti-worker proposal from the Trump administration,” Arguello-Kline said in a statement.

The Nevada Attorney General’s Office has concerns, too. Attorney General Aaron Ford signed onto a 15-page letter sent to the Department of Labor on behalf of 19 states opposing the proposed rule, saying it would hurt tipped workers. Even if the rule’s impact would be less significant in Nevada than in other states, it could still eventually affect workers here, the office noted.

“My office always prioritizes Nevada families, and is proud to stand behind working people who rely on tips to support themselves and their families. By pushing back against the Trump administration, we are taking a stand against their attempts to favor businesses over workers,” Ford said in a statement.

This isn’t the first time the Department of Labor under Trump has tried to change Obama-era rules for tipped employees. A similar rule proposed in 2017 would have allowed tip-sharing among all employees of an establishment, including managers and supervisors, but the administration pulled the proposal following backlash from workers.

The National Restaurant Association and its local affiliate, the Nevada Restaurant Association, have supported both proposed changes.

The National Restaurant Association backs the most recent proposal because it would give restaurants greater flexibility in deciding how to allocate tips among all workers and in assigning duties to subminimum wage employees. The Nevada Restaurant Association supports it because it would give back of house workers the opportunity to earn tips, allowing independent restaurant owners to lower their hourly wages, a representative for the association said.

“This has been a longstanding back-and-forth for quite some time and gone through the courts back and forth,” the representative, who preferred to remain anonymous, said.

While acknowledging the anti-worker elements of the proposal, UNLV hospitality professor William Werner said the rule could have at least one positive impact on employees in the state: Managers would no longer be able to partake in tip pools. It is uncommon for Las Vegas restaurant managers to take a portion of tips received, but it is not unheard of—nor illegal—in Nevada, he said.

“[This] specifically prohibits managers and supervisors from getting a share of the tips,” Werner said of the proposal.

A former in-house lawyer for local hotel-casinos, Werner said the majority of restaurants in the area already pool tips between front of house employees. But tip-sharing among back of house workers is highly unusual, and often explicitly prohibited in Culinary Union contracts, he said.

None of the six establishments in Las Vegas at which Bronson has worked allowed tip sharing among all employees, she said. “Usually, front of house is just sharing with other front of house employees. So the server would tip out the bartender, the back-server and the food-runner, but wouldn’t be tipping out cooks or chefs or anything like that,” Bronson said.

Her fear is that by allowing restaurants to pool tips among all employees, including those who do not traditionally rely on tips, all workers would see a pay cut. Front of house workers would have to give up more of their tips through the pool system, seemingly benefiting back of house employees. But managers could then justify lowering back of house employees’ hourly salaries given that these workers would be eligible for tips, Bronson said.

“This really allows employers to transfer what they should be paying their back of house staff … onto the front of house workers,” she said. “That’s where I see it as being the most problematic.”

The Nevada Restaurant Association representative dismissed concerns about taking tips from front of house workers. “From the folks we’ve talked to, that’s not a big issue,” she said. “If back of house isn’t doing a good job, they’re going to get less tips anyway. So generally, we’re all one family.”

Another issue Bronson sees is that the rule doesn’t clearly define how management could divvy up tips among workers. Culinary Union workers would likely be protected by clear, strict language in their union contracts about tip allocation, but non-union workers could be vulnerable to management exploitation, she said.

“Anytime you have management involved in the tipping or tip-out process at all, there are opportunities for them to exploit that process,” she said.

Bronson supports higher compensation for all workers, including back of house staff, but said the burden should be on restaurant owners. This proposal would instead place that burden on Las Vegas’ many tipped employees, she said.

“I think it’s so, so important for back of house staff to be appropriately compensated. They do not earn enough in most restaurants, and they deserve a raise,” Bronson said. “But I should not have to suffer my salary. It should go through the employer. The employer should have to pay their staff.”

This story appeared in Las Vegas Weekly.