Warren presses Mulvaney, Azar on tip pooling

Sen. Elizabeth Warren (D-Mass.) is demanding answers from Labor Secretary Alexander Acosta and Office of Management and Budget Director Mick Mulvaney over whether they hid an unfavorable report on the administration’s tip-pooling rule.

The controversial rule allows employers who pay the full minimum wage to pool workers’ tips and split them with nontipped workers.

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Bloomberg Law reported Wednesday that Acosta convinced Mulvaney to overrule Office of Information and Regulatory Affairs Administrator Neomi Rao and release the rule without an analysis showing workers could lose billion in gratuities. 

It also reported that Rao tried to block the rule from being released and that Acosta and Mulvaney went ahead despite opposition within their own departments.

“The suggestion that you and Secretary Acosta both overruled your own staffs in order to reach a politically pre-ordained outcome without regard for the welfare of working men and women is deeply damaging to the trust that the American people place in the federal government to use its regulatory power on their behalf, not for lobbyists and narrow corporate interests,” Warren wrote.

In a second letter, Warren also called on Sen. Lamar Alexander (R-Tenn.), the chairman of the Health, Education, Labor, and Pensions (HELP) Committee, to hold an oversight hearing on the controversy.

The regulation, which reverses an Obama-era rule that clarified tips are the property of workers who earn them, was lambasted by Democrats and labor rights groups for not including any safeguard to stop employers from pocketing tips.

A Department of Labor spokesperson said the department does not comment on deliberative processes.

OMB did not respond to a request for comment.

Sen. Patty Murray (D-Wash.), however, was able to reach a deal with Acosta and add language to the $1.3 trillion spending bill released Wednesday night to amend the Fair Labor Standards Act and create a protection regardless of whether the worker makes tips on top of a full minimum wage.

Despite this legislative fix, Warren told Alexander the committee has a responsibility to ensure rulemakings are conducted in a fair and transparent fashion.

“The misleading approach reportedly taken by Secretary Acosta and Director Mulvaney reveals an appalling disregard for the use of evidence and objective analysis in policymaking, and a lack of interest in the millions of hard-working Americans who rely on the Department of Labor, and this committee, to defend their rights and protect their earnings,” she wrote. “The reports raise serious questions about the ability and willingness of Secretary Acosta and Director Mulvaney to objectively and fairly do their jobs.”