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Cabinet approves new measures to regulate tips and gratuities

The new legislation comes after a number of restaurants came in for criticism over how tips were being distributed among employees.

stock image of bill
stock image of bill
Image: Shutterstock/Totsapon Phattaratharnwan

THE GOVERNMENT HAS approved new measures which will stop employers from using worker’s tips to subsidise their wages.

It comes after a drafts Heads of a Bill was put to cabinet ministers for approval in recent weeks.

As it stands, it is illegal for companies to use tips as part of an employee’s minimum wage but it is not illegal for them to use tips as part of a stated salary above that.

The new bill will amend the Payment of Wages Act to ensure tips and gratuities cannot be use to make up, or satisfy, a person’s contractual wages.

It will also require employers to clearly display, for the benefit of workers and customers, their policy on how tips, gratuities, and service charges are distributed.

Minister for Employment and Social Protection, Regina Doherty said: “It has become clear over the past number of months that in a minority of establishments, workers are not being treated fairly with regard to tips.

“As I said previously, I will not tolerate this on my watch and now, having received approval from Government, I look forward to introducing measures which will improve the situation and, crucially, have a sound legal basis.”

She added: “I am determined to always stand up for fairness and the employment rights of low paid and precarious workers. I made significant progress in this regard with the Employment Act 2018, which restricted zero hour contracts and introduced banded hours contracts.”

The new measures arose after a number of businesses came in for criticism over how their tips were being distributed among employees.

Dublin restaurant The Ivy attracted criticism when it told staff last year that they would not be allowed to process payments from customers after the restaurant management alleged that some waiters were asking patrons to pay tips in cash, rather than on a credit card.

The bill will now proceed with the drafting of the necessary legislation, with a statement from the Department saying “it is expected to commence pre-legislative scrutiny of the Bill as soon as possible”.

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