By Dominic McGrath, PA
Workers in the service industry will soon be given legal rights on the payment of tips under new laws approved by the Government.
On Wednesday, Tánaiste and Minister for Employment, Leo Varadkar received approval of draft legislation which will prohibit employers from using tips to make up contractual rates of pay for their staff.
This law should be in place for next year, according to Mr Varadkar.
Employees will also have a legal entitlement to receive tips paid through debit or credit card payments with a provision that the tips are paid in a fair and transparent manner.
There will also be requirements on employers to clearly display their policy on how both card and cash tips are distributed among staff.
Speaking about the approval of the new law, Mr Varadkar said it will be the first time workers will have 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,” Mr Varadkar said
“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.”
Workers losing out
Mr Varadkar said that there was “some evidence” that tipping was being abused by some employers.
“We don’t think it’s widespread.
“But there is some evidence of some businesses not passing on tips to workers and very strong evidence that the public aren’t clear as to what happens.”
He described it as a “small piece of legislation, but an important one”.
Mr Varadkar said that the Cabinet had also backed a proposal to draft legislation to ensure that the time spent on the Pandemic Unemployment Payment will count towards a redundancy lump sum for workers.
He also said that Minister for Finance Paschal Donohoe had guaranteed that the lump sum would not be taxed.
That legislation, Mr Varadkar said, would be ready by the end of the year.