Labor Secretary Alex Acosta convinced Office of Management and Budget (OMB) Director Mick Mulvaney to overrule the nation’s regulatory czar and release a controversial tip pooling rule despite data showing workers could lose billions in gratuities, according to a new report.
Bloomberg Law, citing three current and former executive branch officials, reported that Mulvaney sided with Acosta over the Office of Information and Regulatory Affairs (OIRA), which is led by Administrator Neomi Rao.
OIRA, which is a part of the OMB, is tasked with reviewing and signing off on draft proposed and final rules.
Democrats, consumer groups and attorneys general in 17 states have demanded the agency withdraw the rule after it was reported the Labor Department had withheld an unfavorable report on the economic costs from the proposal it released publicly in December.
The rule would change the Fair Labor Standards Act to allow employers to pool the tips of workers who make at least the federal minimum wage, which is $7.25 an hour. Employees who make less than the federal minimum wage and earn tips to supplement their pay were not part of the proposal.