New bill to get Wynn out of the (tip) pool

You’d think state law was clear on its face.

“It is unlawful for any person to take all or part of any tips or gratuities bestowed upon the employees of that person,” reads NRS 608.160(1)(a).

And by “take,” we can assume lawmakers meant “take,” even if an employer is trying to establish a “tip pool” in which a group of employees who all serve customers in one way or another share the tips those customers give only to certain workers.

But you know what they say about assuming.

In 1983, the state Supreme Court said it was perfectly OK for employers to unilaterally impose a tip pooling program on workers as a condition of their employment, because the employer wasn’t taking and keeping the money and didn’t benefit from the pool.

But it wasn’t until 2006, when casino mogul Steve Wynn decided to implement a tip pooling plan among dealers and pit bosses at Wynn Las Vegas, that things got controversial. Dealers revolted and decided to join a union.

Two things of note: One, Wynn himself — in a desperate, last-minute plea to avoid unionization — admitted he’d made a mistake with the plan. “I got it wrong, I hurt you and I apologize,” Wynn said, according to a recording of the meeting made by one of the dealers present. “Sometimes people with good intentions make mistakes.”

Wynn explained he only wanted to ensure that supervisors got paid an appropriate salary, even after they moved up from dealer jobs, where tips augment incomes considerably. If only Steve Wynn was in a position to do something about rates of pay at Wynn Las Vegas.

Second, after the dealers rejected Wynn’s plea, nothing changed.

A contract was hammered out over an agonizing four years, and when the final signatures were affixed, the tip pool stayed in place. It’s in place to this day, in fact.

You know, the one Wynn said was a mistake.

And Wynn’s not the only one: District Judge Ken Cory ruled in November 2011 that the program violates state law. Employers cannot force workers to share tips with their supervisors, Cory found.

He added that Wynn does benefit from the program: He doesn’t have to reach into his own pocket to fix a wage disparity.

That’s Wynn, who has referred to President Barack Obama as a socialist and has denounced the president’s “redistributionist tendencies.” But Wynn himself has created a mini-version of socialism in his own casino, taking from each according to his tip-generating ability and giving to each according to his needs. If only there was a market-based solution!

Wynn may soon need to find one. Although Cory’s ruling is on appeal to the Nevada Supreme Court, there’s a bill pending in the Nevada Legislature that would end involuntary tip pooling once and for all. Assemblyman Joe Hogan’s AB 141 would make it illegal to “require an employee … as a condition of his or her employment, to enter into an agreement to divide with other employees any tips or gratuities bestowed upon the employee.” The bill would specifically allow voluntary tip pooling among employees, however.

“I just think that this is a pretty awful practice,” says Hogan, who once worked for the U.S. Department of Labor. “It certainly struck a nerve with me.”

Sadly, Hogan is nearly alone in his outrage. The Culinary union — which doesn’t represent dealers but has contracts to represent many other Wynn workers — weighed in on the side of the hotel. And, of course, Wynn will fight Hogan’s bill, said lobbyist and former Assembly Speaker Richard Perkins. Expect Perkins to be joined by the Nevada Resort Association, at least.

Meanwhile, Hogan will work to make a fairly clear state law even clearer, and to show that maybe just this once, you shouldn’t be able to take your employees’ tips just because your name is on the side of a fancy casino.

Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at (702) 387-5276 or ssebelius@reviewjournal.com.