Government approves the drafting of a law that will protect employees’ tips along with customers transparency

The Tánaiste and Minister for Enterprise Trade and Employment, Leo Varadkar TD, has  received Government approval to draft a law that will give new rights to employees, prohibiting the use of tips and gratuities to ‘make up’ contractual rates of pay.

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 aim of the Payment of Wages (Amendment) (Tips and Gratuities) Bill is to:

  • Provide clarity on the meaning of tips, gratuities and service charges
  • Place tips and gratuities, but not service charges, outside the scope of a person’s contractual wages
  • Oblige employers to display prominently their policy on the distribution of both cash and card tips
  • Oblige 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

This new law builds on the suite of legal rights that the Government is introducing to protect workers, which includes the Sick Leave Bill, the Transparent and Predictable Working Conditions Directive and the right to request remote work.

This proposal had been commenced in 2019 but had fallen following the general election of February 2020.