Payment of Wages (Amendment) (Tips and Gratuities) Bill

24th January 2022 | Bills

The Payment of Wages (Amendment) (Tips and Gratuities) Bill will give new rights to employees, prohibiting the use of tips and gratuities to ‘make up’ contractual rates of pay.

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

An important element of the new law will be to give employees a legal entitlement to receive tips and gratuities paid in electronic form (that is, by debit or credit card) with a provision that these tips and gratuities should be paid out to workers in a fair, transparent and equitable manner. A fair and equitable distribution will be context specific and is likely to take into account matters such as staff hours, value of sales income or revenue generated, a worker’s role in service delivery, whether the employee is on a full-time or part-time contract of employment and so on.

There will be new requirements on employers to clearly display their policy on how both card and cash tips, gratuities and service charges are distributed. All electronic tips must be distributed fairly and in a transparent way.

Payment of tips and gratuities by electronic means, in contrast to cash tips that are paid directly to the worker, means that the employer is in control of how these tips and gratuities are distributed. The electronic record generated by this payment method will support and facilitate inspections by the Workplace Relations Commission (WRC) in the event of a complaint being made. How cash tips are distributed will be required to be included in an employer’s publicly displayed policy on the management of tips and gratuities.

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.