NEW LEGISLATION WHICH will guarantee staff in the hospitality industry receive their tips passed through the Oireachtas yesterday and is set to become law. 

The Payment of Wages (Amendment) (Tips and Gratuities) Bill was passed in both Houses of the Oireachtas yesterday.

The new law will ensure that tips and gratuities are distributed fairly to staff. 

Employers will also be banned from describing mandatory charges as “service charges” unless they are treated in the same way as tips or gratuities.

Tánaiste Leo Varadkar said the laws will give greater clarity to those in the industry. 

“This is an important new right for staff in the hospitality and personal services sectors. Most companies look after their staff very fairly, but this new law will stamp out bad practices where they do exist and ensure that tips are distributed fairly among staff. It will also mean that tips received cannot be used as part of basic pay.

“We’re all familiar with tips and service charges, but it’s not always clear how they are allocated to staff, especially if paying by phone or debit card. The Payment of Wages Act will ensure that the tipping and gratuities policy is displayed clearly in any establishment.”

The new law will specifically:

• provide clarity on the meaning of tips, gratuities, service charges and mandatory charges;
• place tips and gratuities outside the scope of a person’s contractual wages;
• oblige employers to display their policy on mandatory charges and the distribution of cash and card tips,
• oblige employers to distribute fairly, equitably and in a transparent manner, tips that are received in electronic form, for example, through debit or credit cards or smart phones,
• ensure that any charge described as a ‘service charge’, or any other term that implies it is a charge for service, is distributed to employees in the same manner as tips received electronically.

Speaking last month, Restaurant Association of Ireland CEO, Adrian Cummins, said: “As an association, we must now question the proposed amendments to the legislation which seek to prescribe to certain sectors of the economy how they may contract for goods and services and what terms can be used.

“We are seeking a meeting with the Tánaiste to discuss the proposals in terms of how it will be operationalised with restaurants & hospitality businesses.”