The Tánaiste and Minister for Enterprise Trade and Employment, Leo Varadkar TD announced plans yesterday to protect employees’ tips and to provide transparency to customers on tips.
With more and more people paying for services electronically, research has shown that there is confusion among consumers as to how tips they add to their bill are distributed.
This new law will come into place as an Amendment to the Payment of Wages Bill with the aim of:
- Providing clarity on the meaning of tips, gratuities and service charges
- Placing tips and gratuities, but not service charges, outside the scope of a person’s contractual wages
- Obliging employers to display prominently their policy on the distribution of both cash and card tips
- Obliging employers to distribute fairly, equitably and in a transparent manner, tips that are received in electronic form, that is, through debit or credit cards or smart phones
The Tánaiste said:
“This new law will, for the first time, give workers legal protections over tips. It will mean that any tips received cannot be counted towards an employee’s basic pay, they must be counted as additional and separate.
“I know many people are sometimes unsure how or if tips and service charges are distributed when paying for a meal, for example, especially when paying by card or phone. Once this law is enacted, all employers will be required to show clearly how tips and service charges are dealt with in a business. This will provide clarity for both customers and staff.
“Most establishments already treat their employees fairly with regard to tips, so for many it will mean no change other than having to display their policy clearly.”
The plan is for this new law to be in place for next year. (2022)
To read more about this new law: https://enterprise.gov.ie/en/News-And-Events/Department-News/2021/October/20211027a.html
UPDATE: 20th Feb 2022
RTE.ie addressed the issue in a recent article (Feb 20th 2022); ‘A tipping point: New law will ensure tips go to staff’, in which they set out the current status on tips and the objectives of the new law.
It may be hard to believe, but currently employers in Ireland are not obliged under law to pass on any tips received from customers to their staff. This means that workers have no protection if their employer decides to keep some, or all of the tips.
But a new law aims to change that. The Payment of Wages Bill has four main objectives.
– Firstly, it will ban businesses from using tips and gratuities to make up the basic pay of their staff. This will ensure that tips and gratuities are paid in addition to their wages.
– Secondly, the bill will provide a legal entitlement for workers to receive tips and gratuities paid in electronic form. It states that these tips and gratuities should be paid to workers in a “fair and transparent” manner. The same will not apply to cash tips – for a number of reasons we’ll get to later.
– Thirdly, an employer will not be able to keep any of the tips received electronically, except under certain conditions set out in the act. For example, if the employer regularly performs the same work as some of the employees.
– Fourthly, the bill will require businesses to clearly display their policy on how tips, gratuities and mandatory service charges are distributed. This is to make sure both staff and customers know where tips are actually going.
The tourism, hospitality, hair and beauty, taxi and delivery services are the main sectors to which the new law will apply.
Gill Stedman, rte.ie
HABIC CEO Margaret O’Rourke Doherty was asked to explain how tipping would normally work in the personal care sector;
Cash tipping is still commonplace in a number of sectors, including the personal grooming industry.
Margaret O’Rourke Doherty, CEO of the Hair And Beauty Industry Confederation (HABIC), said the distribution of tips is not normally an area of contention.
“Normally the consumer will leave a cash tip, given directly to the person or people who provided the service,” Ms O’Rourke Doherty said.
“When a tip is left electronically via the salon, the client is always very clear on who the tip is for, historically this is honoured by the employers,” she added.
However, the HABIC has welcomed the increased transparency the new law will bring for both staff and customers.
Margaret O’Rourke Doherty, CEO HABIC Ireland
To read the entire article : ‘ https://www.rte.ie/news/business/2022/0217/1281409-a-tipping-point-new-law-will-ensure-tips-go-to-staff/
What’s Next?
As business managers and owners, we will have a responsibility and a requirement to have clear and transparent policies in place in line with the new law. HABIC has initiated a conversation with a HR consultancy to obtain direction and will bring you updates over the coming weeks.
Add vote and comments to text box below
You must be logged in to post a comment.