29th December 2023
Minister of State for Business, Employment and Retail, Neale Richmond TD, has announced the introduction of new on the spot fines for businesses found breaching rules surrounding tips as outlined in the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022.
Main provisions:
- Employers who do not provide employees with their terms of employment or provide false information will receive a fine of €1,500
- Employers who do not provide employees with a written statement on the distribution of tips and gratuities, or fails to treat a service charge as a tip, will be subject to a fine of €750
- If employers do not display a ‘tips and gratuities notice’ or a ‘contract Workers Tips and Gratuities Notice’, they will be fined €500
Minister Richmond said:
“Tips are an important aspect of the hospitality industry, something we are especially reminded of after a very busy Christmas period. Protections of tips introduced last year ensure that those who earn the tips are the ones to benefit from them.
“While the majority of employers are in compliance with rules and regulations surrounding the treatment of tips, the introduction of these fines provides another layer of protection for hospitality workers and will help to stamp out bad practices where they exist.
“We believe in putting money back into people’s pockets, this includes allowing workers to keep their hard-earned tips. Not only do the workers deserve to keep the tips they earn, but customers who are paying these tips deserve to know where their money is going.”
Inspectors from the Workplace Relations Commission will continue to visit premises around the country to see if they are in line with the legislation on tips, and if they find a breach, they can issue a fine.
To encourage employers to work with the legislation, if the fine is paid, no further action will be taken. Where the fine is not paid, they will be referred to the WRC’s internal legal affairs committee who will then decide whether to proceed with prosecution.
The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 came into effect on 1 December 2022 and requires a review of the legislation after it has been in effect for one year.
Preparatory work on the review is underway within the Department of Enterprise, Trade and Employment which will then inform the effectiveness of the measures and whether further measures are warranted.
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Notes for Editors
The offences that will now be made subject to a Fixed Payment Notice in lieu of prosecution are:
1.Sections 6B (1) and (2); of Terms of Employment (Information) Act 1994. These provide that an employer who fails to provide an employee with a statement of terms of employment (required by section 3(1A) of the Act) or provides false or misleading information to an employee, or who is reckless as to whether or not false or misleading information is provided, shall be guilty of an offence.
2.Section 4B (8) of the Payment of Wages Act 1991 (as inserted by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022) provides that an employer who fails to provide an employee with a written statement of the total amount of tips or gratuities distributed by the employer for the period to which the statement relates, and the amount of tips or gratuities distributed to the employee to whom the statement is provided, shall be guilty of an offence.
3.Section 4D (2) of the Payment of Wages Act 1991 (as inserted by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022) provides that an employer who describes a charge (including a mandatory charge) imposed on a customer as a ‘service charge’, or uses any similar or cognate term, whether in a tips and gratuities notice or in any other medium, or in any other way leads customers to believe that a mandatory charge shall be distributed to employees, must treat that charge as if it were a tip or gratuity received by an electronic mode of payment. An employer who fails to do so shall be guilty of an offence.
4.Section 4E (2) of the Payment of Wages Act 1991 (as inserted by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022) provides that an employer who fails to display a ‘Tips and Gratuities Notice’ in the prescribed form shall be guilty of an offence.
5.Section 4F (3) of the Payment of Wages Act 1991 (as inserted by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022) provides that an employer who fails to display a ‘Contract Workers Tips and Gratuities Notice’ in the prescribed form shall be guilty of an offence. This is a similar provision to Section 4E (2) but it specifically provides for businesses that employ ‘platform workers’ who are not direct employees but whose work typically attracts tips and gratuities, for example, Deliveroo riders.
An employer who contravenes any of the above provisions shall be guilty of an offence and is liable on summary conviction to a Class C fine, which currently stands at €2,500.
Revocation of existing Regulations 2015
A number of offences are already the subject to a Fixed Payment Notice in lieu of prosecution under SI No 419/2015 - Workplace Relations Act 2015 (Fixed Payment Notice) Regulations 2015. The opportunity is being taken to revoke these regulations and incorporate these offences into one consolidated set of new regulations. These offences are:
1.Section 11 of the Protection of Employment Act 1977 provides that an employer who fails to initiate consultations under section 9 the Protection of Employment Act 1977 or fails under section 10 of that Act to supply employees' representatives with all relevant information relating to proposed redundancies shall be guilty of an offence.
2.Section 4(4) of the Payment of Wages Act 1991 provide that an employer who fails to give a statement in writing of wages and deductions to an employee or fails to ensure its confidentially by the employer, his agents, and by other employees shall be guilty of an offence.
3.Section 23 of the National Minimum Wage Act 2000 provide that an employer who fails to provide an employee with a statement of average hourly rate of pay for any pay reference period falling within the 12-month period immediately preceding the request shall be guilty of an offence.
Revocation of existing Regulations 2017
The form of notice that issues with a fixed payment is prescribed by SI No 32/2017 - Workplace Relations Act 2015 (Fixed Payment Notice) Regulations 2017. Again, the opportunity is being taken to revoke these regulations and incorporate the prescribed form into one consolidated set of new regulations.
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