`[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



                   EXAMINING THE BIDEN-HARRIS ATTACKS
                           ON TIPPED WORKERS

=======================================================================

                                HEARING

                               Before The

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                                 of the

                COMMITTEE ON EDUCATION AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________



           HEARING HELD IN WASHINGTON, DC, SEPTEMBER 18, 2024

                               __________


                           Serial No. 118-62

                               __________


  Printed for the use of the Committee on Education and the Workforce





                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]





        Available via: edworkforce.house.gov or www.govinfo.gov

                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

57-405 PDF                WASHINGTON : 2024









                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

JOE WILSON, South Carolina           ROBERT C. ``BOBBY'' SCOTT, 
GLENN THOMPSON, Pennsylvania             Virginia,
TIM WALBERG, Michigan                  Ranking Member
GLENN GROTHMAN, Wisconsin            RAUL M. GRIJALVA, Arizona
ELISE M. STEFANIK, New York          JOE COURTNEY, Connecticut
RICK W. ALLEN, Georgia               GREGORIO KILILI CAMACHO SABLAN,
JIM BANKS, Indiana                     Northern Mariana Islands
JAMES COMER, Kentucky                FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania          SUZANNE BONAMICI, Oregon
BURGESS OWENS, Utah                  MARK TAKANO, California
BOB GOOD, Virginia                   ALMA S. ADAMS, North Carolina
LISA McCLAIN, Michigan               MARK DeSAULNIER, California
MARY MILLER, Illinois                DONALD NORCROSS, New Jersey
MICHELLE STEEL, California           PRAMILA JAYAPAL, Washington
RON ESTES, Kansas                    SUSAN WILD, Pennsylvania
JULIA LETLOW, Louisiana              LUCY McBATH, Georgia
KEVIN KILEY, California              JAHANA HAYES, Connecticut
AARON BEAN, Florida                  ILHAN OMAR, Minnesota
ERIC BURLISON, Missouri              HALEY M. STEVENS, Michigan
NATHANIEL MORAN, Texas               TERESA LEGER FERNANDEZ, New Mexico
LORI CHAVEZ-DeREMER, Oregon          KATHY E. MANNING, North Carolina
BRANDON WILLIAMS, New York           FRANK J. MRVAN, Indiana
ERIN HOUCHIN, Indiana                JAMAAL BOWMAN, New York
MICHAEL A. RULLI, Ohio

                    Carson Middleton, Staff Director
              Veronique Pluviose, Minority Staff Director

                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                   KEVIN KILEY, California, Chairman

GLENN GROTHMAN, Wisconsin            ALMA ADAMS, North Carolina,
ELISE M. STEFANIK, New York            Ranking Member
JAMES COMER, Kentucky                ILHAN OMAR, Minnesota
MARY MILLER, Illinois                HALEY M. STEVENS, Michigan
ERIC BURLISON, Missouri              MARK TAKANO, California









                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

Hearing held on September 18, 2024...............................     1

                           OPENING STATEMENTS

    Kiley, Hon. Kevin, Chairman, Subcommittee on Workforce 
      Protections................................................     1
        Prepared statement of....................................     2
    Adams, Hon. Alma, Ranking Member, Subcommittee Workforce 
      Protections................................................     3
        Prepared statement of....................................     4

                               WITNESSES

    Boucher, Tom, CEO and Owner, Great New Hampshire Restaurants, 
      Inc........................................................     6
        Prepared statement of....................................     8
    DeCamp, Paul, Member, Epstein, Becker & Green, P.C...........    12
        Prepared statement of....................................    14
    Jayaraman, Saru, President, One Fair Wage....................    29
        Prepared statement of....................................    31
    Barron, Simone, Co-Founder, Full-Service Workers Alliance....    38
        Prepared statement of....................................    40

                         ADDITIONAL SUBMISSIONS

    Chairman Kiley:
        Letter dated September 19, 2024, from the American 
          Association of Cosmetology Schools.....................    94
    Foxx, Hon. Virginia, a Representative in Congress from the 
      State of North Carolina:
        Additional testimony from Simone Barron..................    96
    Scott, Hon. Robert C. ``Bobby'', a Representative in Congress 
      from the State of Virginia:
        Democratic staff document entitled, ``A Slap on the 
          Wrist, How it Pays for Unscrupulous Employers to Take 
          Advantage of Workers''.................................    52








 
                   EXAMINING THE BIDEN-HARRIS ATTACKS
                           ON TIPPED WORKERS

                              ----------                              


                     Wednesday, September 18, 2024

                  House of Representatives,
             Subcommittee on Workforce Protections,
                  Committee on Education and the Workforce,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m., in 
Room 2175, Rayburn House Office Building, Washington, DC, Hon. 
Kevin Kiley (Chairman of the Subcommittee) presiding.
    Present: Representatives Kiley, Grothman, Miller, Burlison, 
Foxx, Adams, Takano, Hayes, and Scott.
    Staff present: Annmarie Graham Barnes, Deputy 
Communications Director; Mindy Barry, General Counsel; Sheila 
Havenner, Alex Knorr, Legislative Assistant; Trey Kovacs, 
Professional Staff Member; Andrew Kuzy, Press Assistant; 
Georgie Littlefair, Clerk; John Martin, Deputy Director of 
Workplace Policy/Counsel; Hannah Matesic, Deputy Staff 
Director; Carson Middleton, Staff Director; Audra McGeorge, 
Communications Director; Kevin O'Keefe, Professional Staff 
Member; Jacob Pletcher, Staff Assistant; Seth Waugh, Director 
of Workforce Policy; Maura Williams, Director of Operations; 
Gavin Anderson, Minority Intern; Ilana Brunner, Minority 
General Counsel; Stephanie Lalle, Minority Communications 
Director; Jessica Schieder, Minority Economic Policy Advisor; 
Dhrtvan Sherman, Minority Research Assistant; Bob Shull, 
Minority Senior Labor Policy Counsel; Brashanda McCoy, Minority 
CBCF Intern; Marie McGrew, Minority Press Assistant; Eleazar 
Padilla, Minority Staff Assistant; Mason Pesek, Minority Labor 
Policy Counsel; Veronique Pluviose, Minority Staff Director; 
Banyon Vassar, Minority Director of IT.
    Chairman Kiley. The Subcommittee on Workforce Protections 
will come to order. I note that a quorum is present. Without 
objection, the Chair is authorized to call a recess at any 
time.
    Today the Committee convenes to examine an issue that 
affects millions of hard-working Americans, especially those in 
our restaurants, bars and hotels: tipped workers. These workers 
are the face of the American economy, linking our citizens with 
the goods and services on which their lives depend.
    Their livelihoods depend not only on the tips they earn, 
but also on the policies that govern their pay. Unfortunately, 
a misguided, Biden-Harris administration rule is putting their 
jobs and wages at risk. Under the Fair Labor Standards Act, 
there is a system in place that has been around for decades. It 
is called the tip credit.
    It allows employers to count a portion of an employee's 
tips toward the minimum wage. This system has worked for years. 
It allowed tipped employees to be paid a base wage that is less 
than the Federal standard, as long as their combined earning 
with tips exceeds the Federal minimum wage. It is common sense, 
and it helps the workers because most tipped workers earn far 
more than the Federal minimum wage.
    A recent study by the National Restaurant Association found 
that the median tipped worker earns $27.00 an hour, and that is 
not an anomaly, it is the norm. The current system gives tipped 
workers the opportunity to thrive, and it does not just help 
them, it helps the restaurants and small businesses that employ 
them.
    Unfortunately, across the country we are seeing anti-worker 
policies that phaseout the tip credit altogether. In Seattle, 
for instance, raising the base wage for tipped employees led to 
job losses. One Seattle-based restaurant server said we need to 
have some balance here because right now we are losing jobs, we 
are losing hours, we are losing tipped income, and it is not 
good.
    I am grateful to have that worker here today to testify. 
There are over 4 million Americans working in tipped 
occupations, and they are telling us very clearly; do not take 
away the tip credit. In a recent survey 90 percent of tipped 
employees said they prefer the current system, and 87 percent 
are afraid that if their employers are forced to pay a higher 
base wage without counting tips, their earnings will go down.
    These workers are telling us the economic reality of their 
workplaces and we should listen to them. Sadly, the Biden-
Harris administration has not listened. The Department of 
Labor's 2021 Tip Rule restricts the tip credit drastically. 
What is more, if an employee spends just 30 minutes on duties 
that do not produce tips, the employer can no longer claim the 
tip credit at all. It is essentially a requirement on small 
businesses to track their employees' every movement, minute by 
minute.
    It is burdensome, invasive, and altogether out of touch 
with the realities of working life. Fortunately, just last 
month we saw a major victory for common sense. The U.S. Court 
of Appeals for the Fifth Circuit struck down the 2021 Tip Rule, 
calling it contrary to the Fair Labor Standards Act.
    This ruling was a win for both workers and the small 
businesses, but the fight is far from over. This Committee is 
dedicated to supporting workers, small businesses, and the 
customers who rely on them. The tip credit benefits all three. 
It provides flexibility for businesses, ensures tipped workers 
earn more, and helps maintain a thriving service industry.
    With that, I look forward to the testimony of our esteemed 
witnesses, and yield to the Ranking Member for an opening 
statement.
    [The Statement of Chairman Kiley follows:]

  Statement of Hon. Kevin Kiley, Chairman, Subcommittee on Workforce 
                              Protections

    Today, the Committee convenes to examine an issue that affects 
millions of hardworking Americans, especially those in our restaurants, 
bars, and hotels -- tipped workers. These workers are the face of the 
American economy, linking our citizens with the goods and services on 
which their lives depend. Their livelihoods depend not only on the tips 
they earn but also on the policies that govern their pay. 
Unfortunately, a misguided Biden-Harris rule is putting their jobs and 
wages at risk.
    Under the Fair Labor Standards Act, there is a system in place that 
has been around for decades called the tip credit. It allows employers 
to count a portion of an employee's tips toward the minimum wage. This 
system has worked for years. It allows tipped employees to be paid a 
base wage that is less than the federal standard, as long as their 
combined earnings, with tips, exceed the federal minimum wage.
    It is common sense. It helps the workers, because most tipped 
workers earn far more than the federal minimum wage. A recent study by 
the National Restaurant Association found that the median tipped worker 
earns $27 an hour. This is not an anomaly; it is the norm. The current 
system gives tipped workers the opportunity to thrive. It does not just 
help them -- it helps the restaurants and small businesses that employ 
them.
    Unfortunately, across the country we are seeing anti-worker 
policies that phase out the tip credit altogether. In Seattle, for 
instance, raising the base wage for tipped employees led to job losses. 
One Seattle-based server said, ``We need to have some balance here, 
because right now, we're losing jobs, we're losing hours, we're losing 
tipped income, and it's not good.'' I am grateful to have that worker 
here to testify this morning.
    There are over four million Americans working in tipped 
occupations, and they are telling us very clearly: do not take away the 
tip credit. In a recent survey, 90 percent of tipped employees said 
they prefer the current system. 87 percent are afraid that if their 
employers are forced to pay a higher base wage without counting tips, 
their earnings will go down. These workers are telling us the economic 
reality of their workplaces, and we should listen to them.
    Sadly, the Biden-Harris administration has not listened. The 
Department of Labor's 2021 tip rule restricts the tip credit 
drastically. What is more, if an employee spends just 30 minutes on 
duties that do not produce tips, the employer can no longer claim the 
tip credit at all. It is essentially a requirement on small businesses 
to track their employees' every movement minute by minute. It is 
burdensome, invasive, and altogether out of touch with the realities of 
working life.
    Fortunately, just last month, we saw a major victory for common 
sense. The U.S. Court of Appeals for the Fifth Circuit struck down the 
2021 tip rule, calling it contrary to the Fair Labor Standards Act. 
This ruling was a win for both workers and small businesses, but the 
fight is far from over.
    This Committee is dedicated to supporting workers, small 
businesses, and the customers who rely on them. The tip credit system 
benefits all three. It provides flexibility for businesses, ensures 
tipped workers earn more, and helps maintain a thriving service 
industry.
                                 ______
                                 
    Ms. Adams. Thank you, Mr. Chairman, and I also want to 
thank the witnesses for joining us today. In one of the richest 
countries in the world no one working full-time should be 
living in poverty. Sadly, that is the reality for millions of 
low-wage workers in this country.
    Currently, under the Fair Labor Standards Act, an employer 
may pay a tipped employee a sub-minimum wage of no less than 
$2.13 per hour and use the employee's tips to meet the 
employer's obligation to pay the Federal minimum wage of $7.25 
per hour. However, the set minimum wage results in lower pay, 
more uncertainty and higher poverty rates for tipped workers 
than for non-tipped workers.
    Through error, or outright wage theft, employers too often 
fail to ensure that their workers are making the full minimum 
wage. According to a 2014 report by the White House National 
Economic Council, and the Department of Labor, more than 1 in 
10 surveyed workers in predominantly tipped occupations report 
that they received hourly wages, including tips, below the 
Federal minimum wage.
    While my republican colleagues may point to a handful of 
high earning tipped workers as evidence of the system's 
success, we must confront the reality of most tipped employees. 
Tipped workers are unfortunately paid less per hour than non-
tipped workers, and they have less access to benefits such as 
paid sick leave, healthcare, short-term disability, life 
insurance, and paid vacation.
    Now, these workers face systemic challenges, and often 
suffer from inadequate pay, and rampant abuse. The conditions 
for tipped workers under the Trump administration were even 
worse. In addition to the fact that roughly half of all jobs in 
the leisure and hospitality sectors were lost between February 
and April 2020.
    The Trump Department of Labor pushed to allow low road 
employers to steal tipped workers hard earned pay. For example, 
the Trump-era Tip Rule would have allowed employers to take the 
tips that tipped workers earn, and share them with untipped 
workers, and managers, as long as the employers pay at least 
$7.25 per hour, and do not take tip credit--a tip credit. In 
practice, the rule would allow employers to steal tipped 
workers' wages to line their own pockets, or subsidize the 
wages of their non-tipped staff.
    According to a 2017 report from the Economic Policy 
Institute, this rule would have resulted in an estimated 5.8 
billion dollars in stolen wages from tipped workers annually. 
As we look ahead it is clear that republicans are laying the 
groundwork for Project 2025, which threatens to further erode 
the protections that workers rely on.
    In stark contrast, congressional democrats are committed to 
advancing legislation that will lift millions of hard-working 
Americans out of poverty and hold unscrupulous employers 
accountable. The Raise the Wage Act would gradually increase 
the Federal minimum wage to $17.00 per hour and phaseout all 
sub-minimum wages.
    The Let's Protect Worker's Act would hold employers 
accountable by closing loopholes, and enforcing penalties for 
those who neglect worker's safety and fair compensation. Our 
economy, our communities and our country are stronger when we 
reward and support hard working families.
    Congressional democrats are committed to raising workers' 
standards of living through policies like expanding access to 
affordable childcare, overtime pay, and paid time off to take 
care of loved ones, and ensuring workers can stand together, 
and negotiate for better wages and benefits. As we proceed with 
today's hearing, let us remember the real faces and stories 
behind these statistics.
    Let us work together to build a system that supports and 
protects all workers. Thank you, Mr. Chairman. I yield back.
    [The Statement of Ranking Member Adams follows:]

Statement of Hon. Alma Adams, Ranking Member, Subcommittee on Workforce 
                              Protections

    Thank you, Mr. Chairman. I also want to thank our witnesses for 
joining us today.
    In one of the richest countries in the world, no one working full-
time should be living in poverty. Sadly, that is the reality for 
millions of low-wage workers in this country.
    Currently, under the Fair Labor Standards Act, an employer may pay 
a tipped employee a subminimum wage of no less than $2.13 per hour and 
use the employee's tips to meet the employer's obligation to pay the 
federal minimum wage of $7.25 per hour.
    However, the subminimum wage results in lower pay, more 
uncertainty, and higher poverty rates for tipped workers than for non-
tipped workers. Through error or outright wage theft, employers too 
often fail to ensure their workers are making the full minimum wage. 
According to a 2014 report by the White House National Economic Council 
and the Department of Labor, more than 1 in 10 surveyed workers in 
predominantly tipped occupations report they received hourly wages, 
including tips, below the full federal minimum wage.
    While my Republican colleagues may point to a handful of high-
earning tipped workers as evidence of the system's success, we must 
confront the reality of most tipped employees. Tipped workers are, 
unfortunately paid less per hour than non-tipped workers, and they have 
less access to benefits such as paid sick leave, health care, short-
term disability, life insurance, and paid vacation. These workers face 
systemic challenges and often suffer from inadequate pay and rampant 
abuse.
    The conditions for tipped workers under the Trump Administration 
were even worse. In addition to the fact that roughly half of all jobs 
in the leisure and hospitality sectors were lost between February and 
April of 2020, the Trump Department of Labor pushed to allow low-road 
employers to steal tipped workers' hard-earned pay.
    For example, the Trump-era tip rule would have allowed employers to 
take the tips that tipped workers earn and share them with untipped 
workers and managers as long as the employers pay at least $7.25 per 
hour and do not take a tip credit. In practice, the rule would allow 
employers to steal tipped workers' wages to line their own pockets or 
subsidize the wages of their non-tipped staff. According to a 2017 
report from the Economic Policy Institute, this rule would have 
resulted in an estimated $5.8 billion in stolen wages from tipped 
workers annually.
    As we look ahead, it is clear that Republicans are laying the 
groundwork for Project 2025, which threatens to further erode the 
protections that workers rely on.
    In stark contrast, Congressional Democrats are committed to 
advancing legislation that will lift millions of hard- working 
Americans out of poverty and hold unscrupulous employers accountable. 
The Raise the Wage Act would gradually increase the federal minimum 
wage to $17 per hour and phase out all subminimum wages. The LET'S 
Protect Workers Act would hold employers accountable by closing 
loopholes and enforcing penalties for those who neglect worker safety 
and fair compensation.
    Our economy, our communities, and our country are stronger when we 
reward and support hardworking families. Congressional Democrats are 
committed to raising workers' standard of living through policies like 
expanding access to affordable child care, overtime pay, and paid time 
off to take care of loved ones and ensuring workers can stand together 
and negotiate for better wages and benefits.
    As we proceed with today's hearing, let us remember the real faces 
and stories behind these statistics. Let us work together to build a 
system that supports and protects all workers.
    Thank you Mr. Chairman, I yield back.
                                 ______
                                 
    Mrs. Miller [presiding]. Pursuant to Committee Rule 8-C, 
all Committee members who wish to insert written statements 
into the record may do so by submitting them to the Committee 
Clerk electronically in Microsoft Word format by 5 p.m., after 
14 days from the date of this hearing, which is October 2, 
2024.
    Without objection, the hearing record will remain open for 
14 days after the date of this hearing to allow such statements 
and other extraneous material referenced during the hearing to 
be submitted for the official hearing record.
    I note for the Subcommittee that some of my colleagues, who 
are not permanent members of this Subcommittee, may be waving 
on for the purpose of today's hearing. I will now turn to the 
introduction of our distinguished witnesses.
    Our first witness today is Mr. Tom Boucher, who is the 
Owner of Great New Hampshire Restaurants, Incorporated, which 
is located in Bedford, New Hampshire, and who is testifying on 
behalf of the National Restaurant Association.
    Our second witness is Mr. Paul DeCamp, who is a Member of 
Epstein, Becker and Green, P.C., located in Washington, DC, and 
is a practicing wage and hour attorney.
    Our third witness is Ms. Saru Jayaraman, who is President 
of One Fair Wage in New York, New York.
    Our final witness is Ms. Simone Barron, who is Co-Founder 
of Full-Service Workers Alliance in Seattle, Washington. We 
thank the witnesses for being here today, and we look forward 
to your testimony. Pursuant to Committee Rules, I would like to 
ask each of you to limit your oral presentation to a 5-minute 
summary of your written statement.
    I would also like to remind witnesses to be aware of their 
responsibility to provide accurate information to the 
Subcommittee. I will first recognize Mr. Boucher.

   STATEMENT OF MR. TOM BOUCHER, OWNER, GREAT NEW HAMPSHIRE 
    RESTAURANTS, INC., ON BEHALF OF THE NATIONAL RESTAURANT 
              ASSOCIATION, BEDFORD, NEW HAMPSHIRE

    Mr. Boucher. Thank you, Chairman Kiley, Ranking Member 
Adams, and distinguished members of the Subcommittee. Thank you 
for the opportunity to testify today. My name is Tom Boucher, 
and I am the CEO and owner of Great New Hampshire Restaurant. 
What began as one small restaurant in 1984, has grown into nine 
locations employing 800 people, and serving over 2 million 
guests annually.
    I am proud to say we are celebrating our 40th anniversary 
this year. In 1987 I started as a server at T-Bones, learning 
every aspect of the business from the ground up. This is not 
just my story, it is the story of thousands in our industry. 
The restaurant industry is unique because it provides upward 
mobility, offering opportunities for anyone regardless of 
background to start in entry level positions, and build lasting 
careers through hard work and dedication.
    Over 60 percent of Americans have worked in a restaurant. 
Eight out of ten restaurant owners, including myself started in 
those same roles. The restaurant industry does not just provide 
jobs, it provides a path to success offering opportunities for 
personal growth, financial independence, and entrepreneurship.
    That said, running a restaurant is not easy. Margins are 
razor thin, and well-meaning legislation or regulation, if it 
does not account for the realities of our industry, and have 
serious unintended consequences, and today I want to focus on 
two key issues affecting the restaurants and their employees, 
tip credit and the Department of Labor's 80/20/30 Rule.
    The tip credit is vital to restaurants like mine. It allows 
employees to earn significantly more than the Federal minimum 
wage, while helping restaurants manage labor costs. At my 
restaurant, service consistently earned 20 and 30 dollars an 
hour, with some earning even more. No tip server ever makes 
less than minimum wage, and they are protected by the Federal 
law to ensure that.
    Our employees understand how important the tip credit is to 
their livelihoods. In fact, some of my employees launched a 
campaign called We Like Our Tips.com to voice their support for 
keeping the tip credit intact. They know that eliminating the 
tip credit would limit their earning potential.
    We have already seen what happens when tip credit is 
removed. In New Hampshire, two restaurants switched to a flat 
hourly wage model, and their servers left for other restaurants 
where they could earn more through tips. Both businesses 
eventually closed. The very work that these policies are meant 
to help end up losing out.
    Here in Washington, DC, nearly 1,000 restaurant jobs have 
been lost after voting members passed Initiative 82 to phaseout 
the tip credit. A survey found that 86 percent of local 
restaurant operators believe rising tip minimum wage harms 
their operations leading to increased prices, reduced staff and 
closures.
    These are real world outcomes of policies that do not 
consider the unique needs of the restaurant industry. Without 
the tip credit, labor costs for restaurant operators would 
skyrocket. We would be forced to substantially raise prices, 
cut hours, or in the worst case shut down.
    The ripple effect would hurt local farmers, suppliers, and 
other businesses. When restaurants close, the entire local 
economy suffers. In addition to preserving the tip credit, I 
would like to address the Department of Labor's 80/20/30 rule. 
This rule restricted the amount of time tipped employees could 
spend on non-tipped tasks, creating unrealistic and unnecessary 
burdens.
    In the fast-paced world of restaurants, employees often 
switch tasks, as we call it ``on the fly.'' A server might 
reset tables, restock items, or roll silverware, all part of 
ensuring the best possible customer experience. Tracking and 
limiting these tasks was just not practical.
    It was impossible. Thankfully, the Fifth Circuit of Appeals 
struck the rule down, recognizing that it did not reflect the 
realities of the industry. We need to ensure that this kind of 
burden does not return. That is why we support H.R. 1621, the 
Tipped Employee Protection Act, to prevent the reintroduction 
of a similar rule.
    Chairman Kiley, Ranking Member Adams, and distinguished 
members of the Subcommittee, thank you again for the 
opportunity to speak with you today. In conclusion, I want to 
emphasize that the decisions made here have real-world 
consequences.
    The restaurant industry is the cornerstone of local 
economies, providing jobs, fostering community engagement, and 
offering pathways to economic mobility and personal success. 
The success of restaurants like mine, depends on policies that 
allow us to operate substantially, and contribute to the local 
and national economy.
    Eliminating the tip credit or reinstating rigid rules like 
the 80/20/30 Rule would hurt employees, small business owners, 
and the communities that rely on us. I urge you to carefully 
consider the broader impact of these policies and protect the 
flexibility and structure that allows the restaurant industry 
to thrive. Thank you for your time.
    [The Statement of Mr. Bocher follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mrs. Miller. Thank you, Mr. Boucher. I will next recognize 
Mr. DeCamp.

STATEMENT OF MR. PAUL DECAMP, MEMBER, EPSTEIN, BECKER & GREEN, 
                     P.C., WASHINGTON, D.C.

    Mr. DeCamp. Good morning, Chairman Kiley, Ranking Member 
Adams, and distinguished members of the Subcommittee. Thank you 
for inviting me to testify at this hearing to discuss tipped 
workers. The Fair Labor Standards Act sets forth the Federal 
requirements regarding minimum wage, overtime, and child labor.
    For most workers, the income from their job consists 
primarily or entirely of wages paid by their employer. Some 
jobs involve a second, often substantial source of income in 
addition to employer-paid wages, tips from customers, clients, 
or patrons.
    For nearly 60 years the law has recognized the concept 
known as the tip credit, which allows employers in certain 
circumstances to count a portion of the tips their employees 
receive as satisfying the minimum wage, while paying a lower 
direct wage.
    In essence, the tipped credit acknowledges the reality from 
the standpoint of ensuring that workers have the protections of 
the minimum wage, someone who receives $7.25 per hour directly 
from her employer, is on an equal economic footing with someone 
who receives at least that same amount in direct wages and tips 
combined.
    In the late 1970's the Department of Labor began parsing 
the various tasks restaurant servers, bartenders, and other 
employees perform, trying to identify situations where the 
Department believed that the employer should not be able to 
take the tip credit.
    This activity culminated in 1988 with the Department's so 
called 80/20 Rule, an enforcement policy which in general 
terms, employers lose the ability to take the tip credit for 
tasks that do not directly and immediately produce tips, if the 
employee spends more than 20 percent of the work week on those 
activities.
    Nearly every court that considered the issue deferred to 
the Department's view applying both Chevron Deference and the 
Supreme Court ruling in Auer v. Robbins. Beginning in 2009, the 
Department under four successive administrations, reversed the 
policy on 80/20 taken by the previous administration.
    In 2021, the current administration issued a regulation 
codifying the 80/20 principle, along with the new concept that 
an employer may not take the tip credit if a worker spends more 
than 30 continuous minutes on tasks that do not generate tips. 
Two trade associations challenged the 2021 final rule in Court.
    After oral argument before the United States Court of 
Appeals for the Fifth Circuit, before the court issued its 
decision, the Supreme Court handed down its decision in Loper 
Bright Enterprises v. Raimondo, which overruled Chevron.
    Now, instead of deferring to an agency's preferred 
interpretation of the statute at the first sign of textual 
ambiguity, as had been the case for the past 40 years, courts 
considering the validity of a regulation must independently 
discern the meaning of the statute, using all the available 
tools of statutory construction.
    Late last month, the Fifth Circuit issued its decision in 
Restaurant Law Center against Department of Labor, applying 
Loper Bright, the court concluded that the 2021 regulation 
fails under the Administrative Procedure Act, both because it 
conflicts with the text of the FLSA, and because it is 
arbitrary and capricious.
    The Fifth Circuit emphasized that the statute focuses on an 
employee's occupation, not how much time she spends pursuing 
tips. The court then vacated the regulation. H.R. 1612, the 
Tipped Employee Protect Act, would amend the FLSA in a way that 
is in line with the Fifth Circuit's recent ruling. The bill 
clarifies that the tip credit is available so long as the 
employee receives sufficient tips and hourly earnings to 
satisfy minimum wage.
    This approach is entirely consistent with the historical 
purpose of the tip credit, ensuring that tipped employees are 
no worse off than non-tipped employees with respect to the 
protections of the Federal minimum wage. In recent years there 
have been various executive and legislative efforts to 
eliminate the tip credit, which would require employees to pay 
tipped employees the full minimum wage.
    These efforts are, in my view, misguided for several 
reasons. First, tipped workers currently have total earnings, 
including tips, that average $15.51 per hour, which is more 
than double the minimum wage. Second, when given the choice of 
receiving tips, along with a wage subject to the tip credit, or 
else an all-in menu pricing concept with no tipping, 97 percent 
of tipped employees prefer the ability to receive tips.
    Third, customers overwhelming prefer the option of tipping, 
to having that choice taken away from them. Fourth, roughly 3 
in 4 American labor economists agree that reducing the tip 
credit leads to a loss of jobs in service industries.
    Finally, economic data show that reducing or eliminating 
the tip credit does not lead to an increase in employees' 
weekly earnings. The current tipping system, including the tip 
credit does not hurt workers, it helps them. Eliminating the 
tip credit would benefit neither workers nor consumers.
    The FLSA enables tipped employees to achieve substantial 
earnings, and we should continue to allow the law to do its 
work. This concludes my prepared remarks. I welcome any 
questions the members of the Subcommittee may have. Thank you.
    [The Statement of Mr. DeCamp follows:]

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    Mrs. Miller. Thank you, Mr. DeCamp. I will now recognize 
Ms. Jayaraman.

STATEMENT OF MS. SARU JAYARAMAN, PRESIDENT, ONE FAIR WAGE, NEW 
                         YORK, NEW YORK

    Ms. Jayaraman. Jayaraman. Good morning, my name is Saru 
Jayaraman, I am the Co-Founder and President of One Fair Wage. 
I am also the Director of the Food Labor Research Center at the 
University of California Berkeley. For the last 22 years, we 
have spent, actually thousands and thousands of hours 
collecting surveys from tens of thousands of restaurant workers 
and tipped workers across the country.
    They have overwhelmingly told us, after decades, that their 
top concern is their wages, which makes sense, knowing that the 
restaurant industry is by far the absolute lowest paying 
employer in the United States of America. Every year the U.S. 
Department of Labor puts out a list of the ten lowest paying 
jobs. Seven of the ten are in the restaurant industry, in fact, 
the seven lowest paying, and four of the seven are tipped 
occupations, even when you take tips into account.
    That is because the wage structure in the restaurant 
industry dates back to Emancipation. Prior to Emancipation, 
waiters in the United States were mostly white males. They 
actually received a full wage, no tips. After Emancipation, 
restaurants sought the ability to hire newly freed black 
people, black women in particular, not pay them a wage, and 
force them to live entirely on a new concept that had just come 
from Europe.
    Now in Europe tips were always on top of a wage, never 
instead of a wage. It was Emancipation and Jim Crow America 
that allowed restaurants to change the concept of tipping for 
the first time in world history from being an extra bonus on 
top of a wage, to becoming the entirety of the wage itself.
    That became law in 1938, as part of the New Deal, and is 
the origin of the sub-minimum wage for tipped workers, which is 
a ridiculous $2.13 an hour today. Today, still, 160 years later 
since Emancipation, tipped workers are overwhelmingly women, 
disproportionately women of color, more than two-thirds women. 
They are largely women working in very casual restaurants and 
bars across the country.
    Their median wage, including tips, according to the 
American Community Survey is $15,000.00. That is including 
tips, and that is an average of $7.40 an hour including tips. 
That is a median, meaning half of the workers earn less. That 
has resulted in an enormous amount of economic instability.
    It results in the fact that tipped workers earn--suffer 
from three times the poverty rate of other workers, use food 
stamps at double the rate of other workers, and have the 
highest levels of wage theft, of any industry in the United 
States, according to the U.S. Department of Labor, and every 
Department of Labor in the United States.
    There are seven states that have done it differently for 
decades, California, Oregon, Washington, Nevada, Minnesota, 
Montana and Alaska, and today we bring findings, looking at the 
last couple of years since the pandemic comparing the seven 
states that have had a full minimum wage to the 43 states that 
have not. The seven states have outperformed the 43 states on 
every measure.
    They have outperformed the 43 states in terms of restaurant 
establishment growth, higher in the 43 states--in seven states 
since the pandemic. They have outpaced 43 states with a sub-
minimum wage in terms of employment growth in restaurants, and 
they have outpaced the 43 states in terms of wages, including 
tips.
    Washington State, where Ms. Barron is from, has actually 
outpaced all 43 states according to the National Restaurant 
Association's data itself. Washington State has outpaced other 
states in terms of establishment growth, and employment growth.
    The seven states are doing well. They provide a full 
minimum wage with tips on top. Tipping is robust in those 
states, it is the same or higher as it is in the 43 states with 
the sub-minimum wage for tipped workers. The pandemic made this 
disparity between the states much worse.
    With the pandemic workers reported that their tips went 
down, harassment went up. Two-thirds of tipped workers reported 
they could not get unemployment insurance because in most 
states they were told their wages were too low to qualify for 
benefits. With the extreme amounts of both tip reduction and 
harassment increase, 1.2 million restaurant workers walked off 
the job, saying we no longer--70 percent reported that we are 
leaving because we no longer can put up with the low wages in 
this industry.
    As a result, we have tracked thousands of restaurants 
across the country that have raised wages, in fact, to the full 
minimum wage and higher with tips on top in order to recruit 
and retain staff. There is no better data to show that workers 
want this, than the fact that they left the industry in droves, 
saying they cannot tolerate the wage structure in the industry 
any longer.
    It is why workers have been winning wage increases in city 
after city, State after State. It is why it is moving with so 
much momentum right now, and why we are having this hearing 
today. Thank you.
    [The Statement of Ms. Jayaraman follows:]

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    Mrs. Miller. Thank you, and finally I will recognize Ms. 
Barron.

   STATEMENT OF MS. SIMONE BARRON, CO-FOUNDER, FULL-SERVICE 
             WORKERS ALLIANCE, SEATTLE, WASHINGTON

    Ms. Barron. Good morning, and thank you Chairman Kiley, 
Ranking Member Adams, for the opportunity to testify. My name 
is Simone Barron, and I have been a tipped worker in the full-
service restaurant industry for 36 years. I have worked in 
several cities across the country, including Indianapolis and 
Chicago, but I am coming to you today from Seattle, Washington, 
where I have been a tipped worker for the past 24 years.
    Washington State eliminated its tip credit in the 1980's 
and in 2014, when Seattle passed the $15 Now wage law, I was 
making nearly $10.00 an hour plus tips. As of today, the rates 
are $19.97 per hour for the largest operators, and $17.25 per 
hour for the smallest. These rates are set to increase to over 
$20.00 per hour for both large and small operators on January 
1, 2025.
    I wish I were coming to you today to say that our former 
Council member, Kshama Sawant, who championed the $15 Now 
movement, was correct in her statement that $15.00 an hour 
would lift 100,000 workers out of poverty.
    I wish I was bringing you better news today, to say that 
this has all worked out somehow, and that I am living better 
than ever before, but I cannot. The minimum wage hike in 
Seattle is devastating my industry, my job, and my income. 
Seattle is approaching its 11th consecutive wage hike since the 
wage law went into effect. We did not even stop raising the 
wage during the COVID pandemic.
    Since the mandatory wage hike started, hundreds of 
restaurants have closed or moved out of the area. Those that 
remain are forced to reinvent the wheel by changing how they do 
business.
    As the wage hike without a tip credit has gradually eroded 
our industry, workers like myself have been subject to 
surcharges, service charges, non-transparent pay models, 
elimination of tip lines, elimination of tipping, mandatory tip 
pooling to pay non-tripped workers--thank you Patty Murray--
elimination of support staff jobs, elimination of hours and 
shifts, and in many cases loss of jobs as restaurants have 
closed.
    The looming hike on January 1, 2025, promises to bring more 
of the same with the expectation of more layoffs, rising costs 
and menu prices, and even more closures. What this does to the 
service industry is bad enough, but what it is doing to workers 
like myself is devastating.
    Our opportunity to maximize our income under a traditional 
tipping structure is being stripped away, and this pushes 
tipped workers closer to making minimum wage, while raising the 
cost of living for all of us. Cutting hours forces to take on 
two or more jobs, just to work enough to earn a paycheck. The 
elimination of jobs means more people are vying for fewer and 
fewer opportunities to work.
    The minimum wage hike in Seattle has created instability 
for workers, and it is especially true since the COVID 
pandemic. With every next wage hike, one more shift gets cut, 
one less guest comes in, and another job opportunity dries up. 
Since the pandemic, I have yet to find footing in the industry 
that I have always found stability in.
    The industry that helped me go to school, raise a child, 
and pursue my passions seems to have become unreliable, 
unsettled, and unbalanced. These wage hikes are negatively 
affecting non-tipped workers as well. My friend works for a 
major produce provider in Seattle, and he explained to me that 
his company is now pivoting to providing pre-prepped vegetables 
to restaurants because those restaurants can no longer afford 
to employ a prep cook.
    What is about to happen in Seattle with the next wage hike 
has been described by our small business owners as a wipeout. 
When they raise the wage again, the total compensation credit 
that was built into the wage hike for our smallest businesses 
is set to expire.
    They will now be required to pay the same that all the 
larger employers pay. Their labor will go from $17.25 an hour 
to north of $20.00 an hour on January 1st. Last week, our local 
industry leaders held a town hall. They mentioned that because 
of this impending wage hike on January 1st, menu prices would 
need to increase, pay structures would have to change, and 
business models would need to adapt.
    All of this will result in labor costs being passed on to 
customers, while workers like myself will bear the brunt, 
facing the potential elimination of tips, and a predicted wave 
of layoffs. Things are not so great in Seattle.
    I would dare any economist here to keep an eye on what's 
happening in my city, my home, watch the business closures, 
look at how many jobs we have to have, measure how the cost of 
living goes up every time that wage goes up, and you tell me 
how this is helping me, and workers like me, because I cannot. 
Thank you very much. I look forward to your questions.
    [The Statement of Ms. Barron follows:]

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    Chairman Kiley. Thank you very much for your testimony. 
Under Committee Rule 9, we will now question witnesses under 
the 5-minute rule. The Representative from Missouri, Mr. 
Burlison, is recognized for 5 minutes.
    Mr. Burlison. Thank you, Ms. Barron. I found your testimony 
to be very compelling, particularly because you are living it. 
Often you have people up here talking about how you and other 
tipped workers should--what you should believe, and what you 
should think.
    I would think that that would be very demeaning, and 
belittling, to have someone, you know, someone telling you that 
you just do not know what you are talking about what is best 
for you.
    Ms. Barron. Absolutely. One of the things that is really 
sort of just completely weird to me is that we have Ms. 
Jayaraman, representing voices of the restaurant industry. As 
far as I am concerned, Ms. Jayaraman is a labor activist from 
Berkeley.
    She has not worked in the restaurant industry. She is not 
an industry worker. She has not walked a mile in my shoes. For 
her to claim that she is the voice of restaurant workers like 
myself, I do not get it, and most of the people that I know in 
the restaurant industry do not even know who she is, and how 
she can be a voice for lifting workers, I do not know how that 
can happen. It is really--it does not make sense to me.
    Mr. Burlison. Yes, it seemed that there is a lack of 
understanding of basic economics, and the results of some of 
these decisions that are made. You do not have to have an 
economics degree because you are experiencing it firsthand, 
right?
    Ms. Barron. Yes. I am experiencing it firsthand. I mean, I 
live it every day. I see it every day. I live in Seattle, where 
these policies have absolutely devastated us, and more is 
coming. I have--all my friends work in the industry, and the 
stories that we get every day, that I get every day.
    Oh, Simone, you know what? I have to get another job. Why? 
Oh, well they just cut all of our shifts. Me personally, I am 
affected as well. My shifts have been cut now from four to five 
shifts a week down to two, and maybe one a week if I am lucky, 
and that is because this impending hike that is coming on 
January 1, and I am not the only one.
    Mr. Burlison. Right, because if you require the employers 
to pay more, then you eliminate the tipped credit, then the 
only way to accomplish that is to cut hours, right? Cut staff?
    You have fewer people working and providing services. It is 
more expensive to pay those people, and the costs of everything 
goes up, so that you have fewer people working, and the 
people--and everybody is having to pay more.
    Ms. Barron. Exactly, and one of the biggest things, the 
first thing that always happens is the support staff gets cut. 
We are talking about entry level jobs here. Those are usually 
entry level jobs into the restaurant industry. Those are your 
bussers, your service assistants, those are, you know, those 
tend to be people of color, if you want to talk about it that 
way, people who are just starting out in the industry, maybe 
this is their first job in America even.
    Those jobs are getting cut. They are just getting cut.
    Mr. Burlison. Can you talk or touch a little bit upon--I am 
sure you have seen the proposal, proposed change to eliminate 
the taxes on tips.
    Ms. Barron. Yes.
    Mr. Burlison. That is actually going in the opposite 
direction. To me this is a war against tipped workers, but I 
think that this proposed change by the Trump administration 
might actually--you could respond to what your thoughts are on 
that.
    Ms. Barron. Well, I will just--I do not know how they are 
going to work out, no tax on tips. I think it is fantastic 
though. The reason why I am saying, you know, if we were 
sitting here talking about we want, higher wages, even if we 
have a higher wage like $17.00 or more in Seattle, if I am 
working in a restaurant that is really, really booming, and I 
make a lot of tips 1 week, all of the taxes come out of that 
paycheck.
    I worked over Mother's Day weekend. I made a lot of tips. 
Even though I had that higher wage, my paycheck, my wage 
paycheck was only $25.00. To me, it is not about the wages, the 
flat wage that I am getting, it is about the tips that I am 
getting. If we have no tax on that, then I guess then I would 
maybe benefit a little bit from having a higher wage, but it is 
all about the tipping, it is all about the tipping.
    Mr. Burlison. Mr. Boucher, can you touch on the costs of 
complying with all the regulations, the burden of that, and the 
impact on your businesses?
    Mr. Boucher. Sure. I have actually done the calculus a 
number of times over the years, and I think you alluded to 
this, that there is no question that we would have to cut staff 
and increase prices. In our business model, we operate on a 
three-legged stool approach to decisionmaking.
    We operate, make decisions what is best for the employee, 
what is best for the customer, and what is best for the 
business. They all have to balance that three-legged stool. In 
this case, all three lose. All three would lose because we 
would cut hours, cut staff, guests would get worse service, and 
the business already operating on three to five cents of profit 
of every revenue dollar that comes in, would shrink as well.
    It would just devaState our business approach of the three-
legged stool.
    Mr. Burlison. Thank you. My time has expired.
    Chairman Kiley. I now recognize the Ranking Member, Dr. 
Adams for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Ms. Jayaraman, one of 
the major differences between republican and democratic 
administrations is the manner in which the focus is placed on 
how to pay tipped workers for time spent on activities, for 
which they cannot earn tips. First, for the benefit of those 
among us who may not have worked in a full-service restaurant, 
can you explain what side work is?
    Ms. Jayaraman. Yes. Absolutely. First of all, as I 
mentioned, I represent 300,000 restaurant and service workers, 
150,000 petitions from workers were delivered to Congress 
saying people want a raise, a full minimum wage with tips on 
top. Part of the reason that they say that, why so many workers 
have been asking for this is because there is such a high level 
of wage theft, the highest-level effect of wage theft of any 
industry.
    The U.S. Department of Labor has reported an 84 percent 
violation rate with regard to employers complying with the 
rules surrounding the two-tiered wage system, and one of them 
has to do with side work. The fact that there is plenty of work 
that tipped workers are asked to do, that does not allow them 
to actually get tips, rolling napkins, setting up tables, 
putting ketchup bottles, or mustard bottles on the table, 
condiments, all the things that--well, wiping glasses.
    All the things, rolling silverware, all the things that set 
up a table, but do not allow you to interact with guests. It 
was really very problematic to see rules taken away during the 
Trump administration protections--taken away for workers doing 
side work to ensure that while they are doing side work, they 
are not being paid continuously a sub-minimum wage.
    We need to ensure that workers are only doing that for 20 
percent of their time or less, so that most of the time they 
actually have the ability to get the tips that get them to the 
full minimum wage.
    Ms. Adams. Is it correct that time spent on side work is 
time spent not earning tips?
    Ms. Jayaraman. Not earning tips.
    Ms. Adams. Okay. Walk us through how the 80/20 Rule matters 
for restaurant workers.
    Ms. Jayaraman. Right. That is what I was saying--that there 
is a very high level, unfortunately, of wage theft. That means 
employers engaging in activities that do not allow workers to 
get the full minimum wage, or have their rights protected.
    When you have employers having workers do lots of side 
work, not able to access tips, they then are not able to get 
enough tips to bring them to the full minimum wage, which is 
why in our surveys we found 50 percent of workers say I 
regularly, consistently experience times when tips do not bring 
me the full minimum wage, and the employer does not make up the 
difference.
    Ms. Adams. What was the Trump administration's approach to 
paying restaurant workers for activities such as side work?
    Ms. Jayaraman. I want to say that the Trump 
administration's first act coming into office, was to push to 
make tips the property of owners, rather than workers, which 
was the most egregious thing that any administration had ever 
done to tipped workers. When we want to talk about an attack on 
tipped workers, the most precious thing tipped workers have is 
their tips, on top of their wages.
    The fact that the Trump administration tried to make tips 
the property of owners, rather than workers was the first real 
attack on tipped workers. The second was to remove protections 
that they had, that would allow them to actually earn a full 
minimum wage with tips.
    Clearly, if they are allowed--if an employer is allowed to 
pay them a sub-minimum wage, while doing excessive amounts of 
side work, they actually cannot then access enough tips to 
bring them to the full minimum wage.
    Ms. Adams. Ms. Jayaraman, what are your thoughts regarding 
the argument that paying a full minimum wage with tips on top 
would kill business and reduce tipping?
    Ms. Jayaraman. Yes, so as I mentioned, there are seven 
states that have already--require a full minimum wage with tips 
on top. Our research shows that not only have they consistently 
had higher small business growth rates, job growth rates, 
tipping averages in the 43 states, but in fact, during the 
pandemic they had done--they much outperformed the 43 states 
with the sub-minimum wage.
    More recently, one fair wage, a full minimum wage with tips 
on top was passed in Flagstaff, D.C., and we are seeing more 
restaurants, more jobs, and higher wages including tips.
    Ms. Adams. Okay, so your testimony linked the tip credit 
and sub-minimum wage for tipped workers with discrimination and 
sexual harassment, so how does a tip credit make that possible?
    Ms. Jayaraman. With an overwhelmingly female population, 
over two-thirds. These workers are vulnerable to harassment 
from customers in order to have to, you know, feed their 
families and tips. They have to put up with all kinds of 
inappropriate customer behavior in order to feed their families 
and tips, which is why the industry has the highest rates of 
harassment of any industry.
    Ms. Adams. Thank you very much. Mr. Chair, I yield back.
    Chairman Kiley. The Representative from Wisconsin, Mr. 
Grothman, is recognized for 5 minutes.
    Mr. Grothman. Thank you. First of all, I guess for Mr. 
Boucher or Mr. DeCamp, I guess part of the debate here today, 
or what the previous speaker said, kind of implies that people 
are almost destitute here if they are working as a server or a 
bartender.
    I talked to some of the employers in my district, just a 
regular variety sports bar, and even they are amazed at the 
amount of money that their employees are getting in tips. Could 
either of you give a suggestion as to what either the wait 
staff or the bartenders are making, say--first of all, in 
general, and second on say a Friday night?
    Mr. Boucher. Yes. I would be happy to answer it. As I 
mentioned in my testimony, our servers are in between $20.00 
and $35.00 an hour when you include their hourly wage plus 
tips. In fact, we at times are challenged with trying to 
promote a tipped employee into a management position because 
there are times where they are earning more, especially as you 
indicate on those busier weekend nights.
    Our higher end concepts, with the higher check average, 
they earn a significant amount of income, and it is difficult 
sometimes to recruit them to want to become a manager.
    Mr. Grothman. Do they make more than you guys sometimes?
    Mr. Boucher. I am sorry?
    Mr. Grothman. Do they make more than you guys sometimes? 
Your managers? I am sure they do.
    Mr. Boucher. That is what I am saying. There are times, 
yes.
    Mr. Grothman. Yes. I mean I was talking to one of my guys 
recently. His folks are making more than yours, but Mr. DeCamp, 
do you think $20.00 to $25.00 bucks an hour on tips, or do most 
people make more than that?
    Mr. DeCamp. It depends very much on the restaurant, but on 
average they are doing very well, and with most of the 
restaurants that I work with, the front of the house employees, 
the servers, the bartenders and what not, tend to have total 
earnings that are well above what the kitchen staff are 
earning, the cooks, the prep cooks.
    Mr. Grothman. Yes, way more.
    Mr. DeCamp. Right. Those are the positions that people want 
in the restaurants because they are lucrative, so the idea that 
most tipped employees are on the edge of starvation is just 
wrong. That ignores the economic reality.
    Mr. Grothman. Can you give me a crack at what people are 
making, you think, an hour?
    Mr. DeCamp. Right. The current economic data that we have 
seen suggests that the average tipped employee across the 
United States between their cash wages and their tips is 
earning $15.51 an hour. That is across all restaurant concepts.
    Mr. Grothman. Well, they ought to come to other places 
because I think they make more than that, but if that is what 
you think. According to the National Restaurant Association, 
tipped workers earn a median wage of nearly four times the 
current Federal minimum wage.
    Can you discuss the earnings? Well, we kind of covered 
that. I am sorry, how high do you think people get in your 
restaurant if the better people work a little bit harder? What 
do you think they can work their way up to hourly?
    Mr. Boucher. As I said, there are times where I have seen--
I will just give you the number. We have employees that make 
between $75,000.00 and $100,000.00 a year in a tipped capacity.
    Mr. Grothman. All right, that is what I thought. You can do 
that. Not maybe at a base place.
    Mr. Boucher. Yes.
    Mr. Grothman. A little nicer than average, a particular 
busy place. I will ask you here now if you have a detailed 
breakdown as to what an average day would look like with you 
tracking the hours of your tipped employees. Should the 30 
continuous minute rule be finalized?
    Do you want to give us an idea of the amount of paperwork 
that is going to have to go into that?
    Mr. Boucher. You are talking about the 80/20?
    Mr. Grothman. Right.
    Mr. Boucher. It is impossible. It is impossible to track, 
and we did it as best as we could, but it is--you would have to 
have--I would have to hire someone literally, to stand there 
and keep track of every 2 minutes someone is rolling 
silverware, as she indicated, or--and I would argue that these 
other tasks that are being done, that is part of the service 
that they are giving the customer.
    If they are not rolling silverware for that guest, they are 
just throwing silverware and a napkin on a table, that is not 
exactly what our guests want. I would argue that these other 
non-tipped timing is all part of the guest experience.
    Mr. Grothman. I will give you one other question, and these 
are great jobs, like many people I worked in the service 
business when my first jobs were out there, but could you let 
us know when you are hiring somebody, how much training, or 
that sort of thing, goes into before you allow them to become 
wait staff?
    Mr. Boucher. Yes, our servers are trained for at least 
seven shifts, depending on their experience, sometimes ten, and 
they are paid minimum wage for those shifts.
    Mr. Grothman. Okay. Within 2 weeks you can take the job. I 
mean this could be compared to other jobs, you know, a tech 
school degree, and maybe be an apprentice for a couple years, 
within 2 weeks if I apply to your place to be wait staff, 2 
weeks from now I could be making, you know, the $25.00.
    Mr. Boucher. $25.00 an hour, yes. In some cases, that is 
people with no experience at all.
    Mr. Grothman. Right. You can even have an 18-year-old just 
hired like that.
    Mr. Boucher. Correct.
    Mr. Grothman. Okay. Thank you.
    Chairman Kiley. The Representative from California, Mr. 
Takano is recognized for 5 minutes.
    Mr. Takano. Thank you, Mr. Chairman. I want to thank the 
witnesses for being here today. The title of this hearing, 
Examining the Biden Harris Attacks on Tipped Workers, makes it 
obvious that my colleagues across the aisle would like to frame 
their agenda as pro-worker.
    There is nothing pro-worker about advocating for the 
continuation of a sub-minimum wage. The two-tier wage system 
that tipped credits have created costs workers billions of 
dollars a year in wage theft, and employer violations of 
regulations designed to protect tipped workers occurs at 
alarmingly high rates.
    While there are many employers who ensure that their 
employees are being fairly paid, unscrupulous employers who 
seek to save on labor costs or skim off the top of earned tips 
are costing American workers their livelihoods.
    Too many tipped workers in this country are unable to make 
a sustainable living. Ms. Jayaraman, approximately 5.1 percent 
of all workers live in poverty, but for tipped workers the 
share is much higher, 11.3 percent. What role does the tipped 
credit play in pushing workers into poverty?
    Ms. Jayaraman. I would ask, I would challenge anybody here, 
any of you Congress members to try to live on $2.13 an hour, 
with the bulk of your income coming from tips from your 
constituents, depending on whether they like your smile, or 
they like the way you behave, or your body, or whether you let 
them touch you, which is the reality for the overwhelming 
majority of tipped workers in the United States, who are 
overwhelmingly women, disproportionately women of color.
    We have the highest rates of single mothers of any 
occupation, having to put up with all kinds of inappropriate 
behavior from customers in order to feed their children in 
tips. Why are they at more than twice the rate of poverty of 
other workers? It is because tips are unreliable.
    Tips go up. They go down, they go up and down shift to 
shift, week to week, season to season, month to month, but your 
rent and your bills do not go up and down every week, month, 
season to season.
    The instability of tips is why so many workers find quite 
often their tips do not bring them to the full minimum wage. In 
fact, as I have said, 50 percent of workers say regularly they 
experience sometimes tips not bringing them to the full minimum 
wage, and the employer not making up the difference because as 
the U.S. Department of Labor found, an 84 percent violation 
rate with regard to employers complying with these rules.
    The combination of the ridiculously low wage, the 
instability of tips, and the non-compliance with these rules 
results in workers earning too little to feed their families, 
which is why the people who feed us use food stamps at double 
the rate of other workers.
    Mr. Takano. Thank you so much for that. This tip credit 
system also means that employers are relying on customers, as 
you have said, to make up the full employee's wage, and they 
often do not get to, even the Federal minimum.
    You already described how the model puts at risk workers in 
the workplace, and you eluded to specifically discrimination 
and harassment. That is what tipped workers often have to 
endure in their jobs. Is that right?
    Ms. Jayaraman. That is right. Professor Katherine McKinnon, 
who is the Nation's leading scholar on sexual harassment coined 
the term, ``sexual harassment,'' has said that the restaurant 
industry and tipped workers, in particular, have the highest 
rates of sexual harassment of any industry because they have to 
rely on unstable tips and the biases and harassment of 
customers in order to get those tips.
    She also has said that there is no policy she has seen in 
her decades of work on this issue more effective at cutting 
sexual harassment than actually providing these workers with a 
full minimum wage, with tips on top.
    It got worse with the pandemic, thousands of women reported 
to us I am regularly asked, ``Take off your mask, so I can see 
how cute you are before I decide how much to tip you.''
    That was so pervasive. We ended up working with Professor 
McKinnon to coin a new term, ``Maskual Harassment.'' That 
strikes me as so humiliating and undignified for any human 
being who does not have the right to a full minimum wage and 
has to--this sort of leverage over them to permit that 
harassment.
    I mean the trouble that it would take to stand up to that 
when they are on the verge--when they are in poverty. Some 
opponents of paying tipped workers the full minimum wage claim 
that tipped workers do not want a full minimum wage with tips 
on top. What evidence do you have to the contrary?
    Ms. Jayaraman. 147,000 petitions to Congress, and 1.2 
million workers who walked off the job saying we no longer can 
put up with these wages.
    Mr. Takano. I thank you, and I yield back.
    Chairman Kiley. The Representative from Illinois, Ms. 
Miller is recognized for 5 minutes.
    Mrs. Miller. Thank you. Mr. Boucher, how do you think a 
policy to end taxes on tips would help your employees, and 
would that be a positive incentive for restaurant workers?
    Mr. Boucher. I think this is a flash in the pan political 
moment discussing that. It is something that I cannot even wrap 
my head around how that would even play out in the tax code, 
and so I really do not have an opinion on that issue because I 
do feel it is a political statement currently because of the 
election that is coming up.
    Mrs. Miller. Certainly, it would help the employees, 
though?
    Mr. Boucher. I would think so, but there is always going to 
be ways around that, and I think, you know, where is the 
Federal Government going to get the money to reconcile all 
those taxes that are not going to come in?
    Mrs. Miller. Well, I want to thank you for creating small 
businesses that provide jobs and benefit local communities. I 
am sorry that D.C. bureaucrats continue to think that they know 
how to run your business better than you do, especially after 
all the damage that they did to Main Street during COVID. Thank 
you, and I yield back.
    Chairman Kiley. The Ranking Member of the full Committee, 
Mr. Scott, is recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman. Ms. Jayaraman, you have 
indicated that eliminating the tip credit and the sub-minimum 
wage would not reduce tips, and would not have an effect on 
employment or business. Do you have research to show that?
    Ms. Jayaraman. Absolutely. As I said, we just--we have 
years of research showing that the seven states, compared to 
the 43 states have the same or higher small business growth 
rates, establishment growth rates, job growth rates, and 
tipping averages.
    We have a new report today showing that over the last 
couple of years since the pandemic, the seven states have 
actually outpaced the 43 states with higher establishment 
growth rates, higher employment growth rates, and higher 
overall incomes, including tips, compared to the 43 states with 
the sub-minimum wage.
    Since the pandemic we are seeing a gap between the seven 
and the 43 grow, with the seven states providing a full minimum 
wage doing better.
    Mr. Scott. Thank you, and could you provide that research 
for us?
    Ms. Jayaraman. On the Record, yes.
    Mr. Scott. Thank you. In eliminating the tipped credit, how 
would that make life better for workers, rather than increasing 
the--just increasing the minimum wage, eliminating the tipped 
credit, what effect would that actually have on workers?
    Ms. Jayaraman. Yes, so since we are seeing so much evidence 
that the states that have a full minimum wage with tips on top, 
are doing better, in terms of as I said, job growth, 
establishment growth, we know that workers would have the 
ability to grow in the industry.
    Most importantly, they would have the stability, economic 
stability that they are not allowed in the states that provide 
a sub-minimum wage. In sub-minimum wage states, workers have to 
rely on tips that fluctuate to get them to the base wage, or 
higher.
    That, as I said, changes day to day, month to month, week 
to week, shift to shift. A breakfast shift, you get a lot less 
in tips than a dinner shift. The instability of having to rely, 
and the stress of having to not know what you are going to earn 
when you go to work is the major difference.
    Knowing what you are going to earn, and what you can count 
on from your employer then gives you the confidence to reject 
harassment, and that is why we are seeing that the seven states 
with a full minimum wage with tips on top, have one half the 
level of sexual harassment, as the states that have a sub-
minimum wage.
    Why? Workers in those states tell us we can count on a wage 
from our boss. We are not as reliant on customers to feed our 
families, so we get tips, but we do not have to put up with 
anything and everything from customers because we have that 
base wage.
    Mr. Scott. Now, you mentioned schemes that could result in 
wage theft because of side work. Are there other schemes where 
you could essentially steal the worker's tips?
    Ms. Jayaraman. The biggest problem we hear from workers is, 
as I said, they regularly work shifts where their tips do not 
bring them to the full minimum wage, and the employer does not 
make up the difference. That is one.
    The second thing we hear a lot about is people who are not 
supposed to be in the tip pool, whether they are managers, or 
non-tip staff in the tip pool, reducing the amount of tips that 
workers are receiving.
    The third thing we hear is I am asked to do work that is 
not tipped work, and I am paid a sub-minimum wage, and I do 
want to point out Darden is the world's largest employer of 
tipped worker--U.S. largest employer of tipped workers, world's 
largest full service restaurant company.
    A few years ago in their shareholder report, they actually 
announced to shareholders that they would be trying to move to 
have all their workers earn a sub-minimum wage, regardless of 
what they do.
    It is clear as long as there is a sub-minimum wage, there 
is an incentive for employers to have workers do all kinds of 
work. Whether it is side work, or it is cleaning bathrooms, or 
it is back of house work, and try to be able to pay them the 
sub-minimum wage. That is why we need protections for workers 
who earn the sub-minimum wage that most of the time they are 
tipped workers earning tips.
    Mr. Scott. Well, if the protection would be if you get 
caught you have a penalty, are the penalties sufficient?
    Ms. Jayaraman. The penalties are non-existent, and most 
employers end up fighting these kind of charges for years. By 
the time that a worker may even see some kind of restitution of 
their wages, it is years later. The amount of money has 
generally very much decreased.
    They are settling for something a lot less than what they 
are owed, and so, no. Employers do not have any real incentive 
to follow the law because they can delay payment for so long.
    Mr. Scott. Thank you. Mr. Chairman, I have a unanimous 
request that the democratic staff document called, A Slap on 
the Wrist, How it Pays for Unscrupulous Employers to Take 
Advantage of Workers, a document that was developed by the 
democratic staff be entered into the record.
    Chairman Kiley. Without objection.
    [The information of Mr. Scott follows:]

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    Chairman Kiley. The Chairwoman of the full Committee, Dr. 
Foxx, is recognized for 5 minutes.
    Mrs. Foxx. Thank you, Mr. Chairman, and I want to thank our 
witnesses for being here today. Ms. Barron, critics of the tip 
credit sometimes refer to it as a sub-minimum wage. Do you 
believe it is a fair characteristic of the wages earned by 
tipped workers?
    Ms. Barron. No. I do not think it is a fair description of 
that at all. I believe a tip credit is a tool. It is a mutually 
beneficial, economic tool that is used to keep a restaurant 
sustainable, to keep tipped workers making high above the 
minimum wage, and keep back of the house workers making 
competitive wages. That is what a tip credit it.
    It is not a sub-minimum wage. It is an economic tool. I am 
a restaurant worker. I do I know this and nobody else does?
    Mrs. Foxx. Thank you. As someone who waited tables all 
through high school and college, I worked hard for my tips, and 
I was very glad to get them. Mr. Boucher, I understand you have 
been both a restaurant worker, and a business owner in the 
State of New Hampshire, where employers may utilize the tip 
credit.
    What are the benefits of being able to utilize the tip 
credit, and what might it mean for your business if that option 
were eliminated?
    Mr. Boucher. First, it allows employees that are tipped to, 
we actually phrase it this way. They are actually kind of 
running their own business in their section, right? If you have 
four tables, you have the ability to earn as much or as little 
as you want, based on your service, based on how well you are 
taking care of the guest.
    By eliminating that, they may not be as incentivized to 
work, as you have just indicated, as hard as you did. Second, I 
have already said the economics of it would be devastating for 
our company.
    Mrs. Foxx. Well, thank you very much. Again, I have always 
thought that being able to tip people was a sign of good 
service, or not so good service, and as I see tipped workers as 
entrepreneurs basically. They are able to really, really make a 
difference to their customers.
    Mr. DeCamp, the Fifth Circuit recently vacated the Biden-
Harris administration's 2021 tip regulations. This is the first 
time a court has scrutinized the Labor Department Rule since 
the Supreme Court overturned Chevron Deference. Can you explain 
why the Fifth Circuit had concerns with the 80/20/30 standard 
in the Biden-Harris Rule?
    Mr. DeCamp. To put it very succinctly, the court concluded 
that the Departments 80/20/30 regulation was not based on the 
text of the statute. The statute defines tipped employees a 
certain way, by reference to their occupation and their tips. 
What the Department of Labor did was something completely 
different.
    They based it on the time sheet. They based it on tasks, 
and what the court said was that Congress never authorized the 
Department to micromanage the activity of restaurant work at 
that level. It is simply a minimum wage statute.
    Mrs. Foxx. Well, we have seen throughout the time of the 
Biden-Harris administration that it overstepped its bounds all 
of the time. It would like to be all three branches of 
government. It fails often to administer the law, as we write 
it here in Congress, and it is unfortunate we have to rely so 
much on the courts to remind the administration that it is the 
executive branch, and it is its role to administer the laws, 
not make the laws.
    Again, I want to thank all of our witnesses for being here 
today, and shedding light on this very important subject, and I 
thank you, Mr. Chairman. If you need my time, I yield it back 
to you. If not, I yield.
    Chairman Kiley. Thank you very much, Dr. Foxx. I will now 
recognize myself for 5 minutes. Ms. Barron, you have worked as 
a tip worker in Seattle in Washington State, where they 
eliminated the tip credits. You have gotten something of a 
preview of where this new rule from this administration would 
take us.
    In your experience would you say that your fellow tipped 
workers, that they prefer the tip system?
    Ms. Barron. Absolutely. They prefer tips over a flat wage. 
Tips provide us the opportunity to maximize our income, and 
make more than any employer is either willing, or can afford to 
pay. Why would we not want to do that?
    Chairman Kiley. Yes. Well said. You say in your testimony 
here that with the elimination of the tip credit, workers like 
myself have been subjected to surcharges, service changes, non-
transparent pay models, elimination of tip fines, elimination 
of tipping. I mean for all the millions of tip workers across 
America, with this new rule, do you think it would be fair to 
say that they are coming after your tips?
    The bureaucrats in Washington, DC. are coming after your 
tips?
    Ms. Barron. Absolutely, and I will give you an example, and 
that is the Tip Pooling Rule. The one that Patty Murray changed 
the Federal Labor Standards Act language that allows employers 
to take our tips. If you want to talk about wage theft, the 
opportunity to wage theft, to take our tips so that they can 
pay back of the house workers, or non-tipped workers because 
they cannot afford to pay the high wages.
    They cannot afford to keep back of the house wages 
competitive, so now we have in all the one fair wage states, 
this Tip Pooling Rule, that allows the employers to take our 
tips and pay non-tipped employees. That--it is ludicrous. We 
are making a lot less money.
    Chairman Kiley. Thank you very much. I think that is an 
important takeaway from this hearing is that they are coming 
after your tips. Bureaucrats in Washington, DC.
    Ms. Jayaraman. Just like Trump did, right? During the Trump 
administration.
    Ms. Barron. Trump did not do that, Patty Murray did that.
    Chairman Kiley. Excuse me, I was not speaking to you, Ms. 
Jayaraman. Okay. Mr. Boucher, you are a restaurant owner, is 
that correct?
    Mr. Boucher. I am.
    Chairman Kiley. You testified that you have actually seen 
examples of restaurants closing down altogether because of the 
elimination of tipping. Can you explain a little bit about the 
cause and affect there?
    Mr. Boucher. Sure. There were two restaurants in New 
Hampshire. I will not name them right now, but they went to 
that model where they paid their employees a flat wage, then 
they had it on their menus that customers did not have to tip, 
and that was reflected in their pricing of the menu.
    It resulted in these employees--they did not last. One 
restaurant, I think, closed in 6 months, and one did not even 
last a year because these employees--think about it. Do you 
want to work Saturday night for $15.00 an hour, or would you 
rather work Monday lunch for $15.00 an hour?
    What happened was these employees said you know what, I am 
going to work $15.00 an hour at lunch for this restaurant. I am 
going to get a tipped job at this other restaurant, and so they 
eventually lost all their employees because they could make 
more in a tipped wage environment.
    Chairman Kiley. Yes. We have seen this in California with 
the COVID shutdowns, and other very bad policies that caused 
restaurants to shut down, and in that case, it hurts not just 
the workers, but you know, you have families who save money to 
go to their favorite restaurant once a month. It is not there 
anymore.
    You have couples who go there every year on their 
anniversary. You have folks who their one night out a week, 
they like to go to this place with their friends, suddenly it 
is not there. I think that is another takeaway from this 
hearing is that the bureaucrats in D.C. are coming after your 
favorite restaurant.
    Now, of course, I do not want to paint with too broad a 
brush when it comes to folks at the Department of Labor, 
because we have Mr. DeCamp here, who was the administrator of 
the Wage and Hour Division and had a very different set of 
priorities when he was there.
    I think one of the things you mentioned in your testimony 
is that surveys actually show overwhelmingly that workers 
prefer the tip model, right?
    Mr. DeCamp. Well, that is correct. I mean, I think 
everybody would like to have their cake and eat it too, and 
have a very high cash wage, and keep all their tips, but that 
is not the reality. When faced with the practical reality of 
either a cash wage plus--a sub-minimum wage plus tips, or a 
higher flat wage, workers overwhelming want the opportunity to 
get tips.
    Chairman Kiley. Yes. It is like 90 percent, or something 
like that?
    Mr. DeCamp. 97 is the research I have seen.
    Chairman Kiley. Yes. It is interesting, we saw similar 
numbers with another policy that has been fiatted by the 
Department of Labor, the Independent Contractor Rule, where 
they want to force people out of the Independent Contractor 
model, even though 90 percent prefer that model.
    Now, they want to force people, take away their tips, even 
though 90 percent say they prefer getting tips. What do you 
think is going on here? I mean you were in charge of the Wage 
and Hour Division there. There is new leadership now, and they 
are consistently enacting policies without involving Congress 
that specifically do exactly the opposite of what workers want.
    What do you think is behind all this?
    Mr. DeCamp. I think it is bureaucratic arrogance. Agencies 
get used to the courts rubberstamping what they do. I think 
that is going to change now that Chevron has been overruled, 
and I think that agencies are going to be held more strictly 
accountable to adhering to the laws that Congress enacts.
    Chairman Kiley. Thanks very much. My time has expired, and 
I will now recognize the Representative from Utah, Mr. Owens 
for 5 minutes.
    Mr. Owens. Thank you, so much. I appreciate it. Thank you 
guys for being here. I want to start off with Ms. Jayaraman.
    Ms. Jayaraman. Jayaraman.
    Mr. Owens. Thank you so much, sorry about that. Okay. I 
noticed the passion as you talked about the changes the Trump 
administration made coming in. I guess my first question, I 
looked at your background, very impressive, BA from University 
of California, JD from Yale Law University.
    How much time have you spent as a tip worker?
    Ms. Jayaraman. I represent 300,000 workers.
    Mr. Owens. No, no. I have been very specific.
    Ms. Jayaraman. I myself, my family owned restaurants. I 
worked----
    Mr. Owens. No. That is not my question. How much have you 
spent? How much time have you spent as a tip worker? You 
personally?
    Ms. Jayaraman. I have not been a tipped worker.
    Mr. Owens. Okay, thank you. How much time have you spent as 
an owner?
    Ms. Jayaraman. I spent 10 years as an owner.
    Mr. Owens. No, no, in other words----
    Ms. Jayaraman. As a restaurant owner, I spent 10 years.
    Mr. Owens. Your family or you?
    Ms. Jayaraman. Me. Our organization had a restaurant.
    Mr. Owens. All right. Organization or you? I am talking 
about small business owner now. There is a difference in an 
organization----
    Ms. Jayaraman. I started an organization. Our organization 
opened three restaurants.
    Mr. Owens. Did you actually open them yourself, or your 
organization opened it?
    Ms. Jayaraman. As the President of the organization, I 
opened the restaurants.
    Mr. Owens. Okay. I think there is a difference in your 
concept of ownership, and Mr. Boucher here.
    Ms. Jayaraman. I do not think so, because I started them. I 
hired people. I did all the same things that an employer did.
    Mr. Owens. Okay. Well,----
    Ms. Jayaraman. Yes.
    Mr. Owens. I will say this because you are sitting next to 
a tip worker, and it seems to be a disconnect to me. You are 
very confident as you listen to somebody who is telling you you 
are destroying her business. Can I ask you this? You are making 
now, I am sure, a very past six-figure income, does your income 
change when Cracker Barrel, Chili's, Applebee's, My Pizza, Red 
Lobster, TGI, these are all the companies who have left 
California because of the Tip Law.
    There are 10,000 people who have lost their jobs since 
September through January because of this mandatory Tip Law. 
Does your income change if you get it wrong?
    Ms. Jayaraman. That does not make any sense because 
California has had a full minimum wage with tips on top for 
over 50 years, so it does not make sense for businesses to have 
left in the last couple of months.
    Mr. Owens. I reclaim my time. I reclaim my time.
    Ms. Jayaraman. It does not have anything to do with that.
    Mr. Owens. Well, it does.
    Ms. Jayaraman. Yes.
    Mr. Owens. A $20.00 minimum wage----
    Ms. Jayaraman. That is not what we are talking about today.
    Mr. Owens [continuing]. Let me just finish. The direct 
impact of a $20.00 minimum wage has been these companies 
leaving California, the ones you just highlighted as being such 
a great place to be. 10,000 people have lost their jobs. How 
many of those 10,000, because of a $20.00 minimum wage because 
bureaucrats have decided how this industry should work.
    Ms. Jayaraman. None of those jobs or businesses are tipped 
workers or tipped employees. If you look at Denny's, which is a 
very large employer of tipped workers, the CFO of Denny's----
    Mr. Owens. I want to reclaim my time. I want to reclaim my 
time please.
    Ms. Jayaraman [continuing]. Has indicated that Denny's is 
growing faster in California, than in any State in the United 
States because they pay their people a full minimum wage.
    Mr. Owens. Just because you say so does not mean it is so, 
okay. Now, I played NFL for 10 years. Have you ever played in 
NFL by the way?
    Ms. Jayaraman. Have I ever played in the NFL? No. I have 
not.
    Mr. Owens. Okay.
    Ms. Jayaraman. Probably because of sexism.
    Mr. Owens. What would you say if you are given a position 
to make rules in the NFL that you never had to live by? Would 
that be--are you going to give yourself a good name, or give 
yourself a title, good income. Would we take you seriously if 
we were to talk about rules and changes in the NFL if you never 
had experience in that area? The answer is no.
    Ms. Jayaraman. Sir, I have been working with restaurant 
workers for the last 30 years.
    Mr. Owens. Well, you are sitting next to----
    Ms. Jayaraman. Hundreds of thousands of restaurant workers.
    Mr. Owens. You are sitting next to restaurant people right 
now.
    Ms. Jayaraman. Yes. Restaurant workers, like all people, 
can have differences of opinions. The overwhelming majority of 
workers in this industry say we need a raise. We are not paid 
enough because as I said, I would challenge any of you to live 
on $2.00. I would challenge Ms. Barron to live on $2.00 right 
now; to leave Seattle and to go work for $2.00 right now.
    Mr. Owens. Let me--I am sorry, I would like to take back 
the time please. I would like to--OK. Well, you know what, the 
good thing about--I would like to reclaim my time, please. The 
great thing about this great country is choice. Instead of 
saying--we have people like the young lady here, who can leave 
and go to another industry, you know that, right?
    Ms. Jayaraman. Or, go to another State, yes, absolutely.
    Mr. Owens. Well, they are leaving California, so obviously 
it is not working there. They are leaving Seattle because it is 
not working there.
    Ms. Jayaraman. Actually, California has the largest and 
fastest growing restaurant industry in the country.
    Mr. Owens. The sad part of this conversation is 
bureaucrats. Arrogant bureaucrats, who sit there and make these 
rules, and you are sitting next to someone who has been 
impacted. Ten years, 10 years in this industry, and she is 
telling you----
    Ms. Jayaraman. Well, the worst rule was the Trump 
administration trying to make tips the property of owners, 
rather than workers.
    Mr. Owens. She is telling you why. She is telling you what 
she is trying to do, what is happening to her family, and you 
are sitting there with that smile on your face because it does 
not matter to you. You are going to make your income no matter 
what. The problem is we have too many--we have too many 
bureaucrats who sit there with expertise, and just run out--
California is being destroyed by the way because of these kinds 
of rules.
    Ms. Jayaraman. No. California has the largest and fastest 
growing restaurant industry in the United States according to 
the CFO of Denny's.
    Mr. Owens. That is why we are leaving California signs all 
over the place because of the great things they are doing 
there.
    Ms. Jayaraman. All the chains have grown faster in 
California, than any State in the U.S., according to the CFO of 
Denny's.
    Mr. Owens. Do me a favor. Keep it in California then, thank 
you so much. I yield back my time.
    Chairman Kiley. I want to thank our witnesses for their 
testimony, and I now recognize the Ranking Member for a closing 
statement.
    Ms. Adams. Thank you, Mr. Chairman. I want to thank the 
witnesses as well, but you know, Congress is a good example of 
the fact that we make rules, and sometimes we do not know a lot 
about what people are going through, so you know, maybe we are 
in that sense, we do not know what we do not know as well.
    I do appreciate what has been said here today. The current 
sub-minimum wage with tipped employees perpetuates low pay, 
enables, inexcusable levels of wage theft, and it leads to 
higher poverty rates. Despite some high earning expectations, 
most tipped workers face income insecurity, and limited or no 
access to benefits.
    The Trump administration's attempt to gut protections for 
tipped workers have only worsened these issues by allowing 
employers to steal almost 6 billion dollars of worker's hard-
earned tips for themselves each year. Luckily, in 2021, the 
Biden-Harris administration withdrew the Trump administration's 
extreme attack on tipped workers by ensuring workers, not their 
bosses, get worker's tips.
    It is abundantly clear that there are two agendas present 
today. The republican's agenda will weaken worker protections 
and let low road employers off the hook for breaking the law. 
While the democratic agenda is focused on uplifting workers by 
advancing legislation like the Raise the Wage Act, and the 
Let's Protect Workers Act, which will secure fair wages, close 
loopholes, and hold dishonest employers accountable.
    Let us work together to build a system that supports all 
workers and addresses these pressing issues. I thank the 
witnesses very much for being here today, for your testimony. 
Mr. Chairman, I yield back.
    Chairman Kiley. Thank you very much. I think this hearing 
has brought to light some important implications of the current 
policy, well, the policy that is no longer in effect because it 
was struck down by a court, but clearly the direction that this 
administration wants to take us.
    That for millions of Americans, who rely on tips, who are 
proud of the tips they earn, who appreciate the opportunity to 
earn tips, and depend on them for their livelihood, you have a 
Department of Labor in this Biden Harris administration, under 
the direction of unconfirmed Acting Secretary Julie Su, that is 
coming after your tips, simply by issuing regulations.
    I think that is a very alarming thing, and the contrast 
could not be clearer because we have legislation right now in 
Congress that would actually say you get to keep your tips 
entirely, no taxes on tips. The contrast could not be clearer 
between that and saying we do not want you to have any tips at 
all.
    Then we also saw that for the folks who run restaurants, 
this could be a very challenging industry, especially in recent 
years. This is really a threat to the viability of a lot of 
restaurants, and so they are coming after your favorite 
restaurant as well.
    Coming from California, we have seen something of a preview 
of this set of policies, after all, the current Acting 
Secretary, Ms. Su, was the Department of Labor head in 
California, and under her leadership in the Newsom 
administration, California for most of her tenure had the 
highest unemployment rate in the entire country.
    We had the slowest level of wage growth. Absolutely last 
out of the 50 states. We also had the highest poverty rate in 
the United States. Her record there was so bad that even a 
majority of her own party in the Senate refused to confirm her. 
Now, that was no matter to the Biden administration.
    They have decided to keep her there without a vote, 
shattering all records for an unconfirmed Acting Secretary 
remaining in office. The Vice President, Kamala Harris, even 
went so far as to say ``I'm not going to call her Acting.'' 
Even though the Senate refused to confirm her, Vice President 
Harris, sitting Vice President of the United States, basically 
shoves the Constitution aside and says I am not going to call 
her Acting.
    She has remained there and has continued to promulgate 
these anti-worker policies. I think that the common thread as 
we discussed, between this and say the Independent Contractor 
Rule, is these rules by force run directly against the wishes 
of workers.
    90 percent prefer the tip model. Similar numbers of 
independent contractors prefer to be independent contractors, 
and yet they want to issue orders without so much as a vote of 
Congress that say we are going to take away your tips, we are 
going to take away your right to earn a living on your own 
terms.
    Fortunately, under the leadership of Dr. Foxx, this 
Committee, Education and the Workforce, is fighting back 
against these overreaching regulations. We just had a good 
court ruling on the Tipping Rule, the Independent Contractor 
Rule is being challenged in court as well, and we will continue 
to fight to protect workers and small businesses.
    With that, and seeing without objection, there being no 
further business, the Subcommittee stands adjourned.

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    [Whereupon, at 11:18 a.m., the Subcommittee was adjourned.]


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