New law to protect employees' tips to be introduced

Rebecca Black, PA

A new law to protect employees’ tips is to be introduced on December 1st.

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 will see employees given legal rights over the payment of tips.

It is to provide more clarity for customers and new requirements on employers to clearly display their policy on tips and service charges

The new law will mean that any charge called a “service charge” will have to be distributed to staff as if it were a tip or gratuity received by electronic means.

The period between now and December 1st will give employers time to prepare for the changes required by the new law, which have been well signalled.

Minister for Enterprise Trade and Employment Leo Varadkar said: “Tips can form a significant percentage of a worker’s take-home pay and these changes go a long way to ensuring those tips are distributed to the people who have earned them.

“This new law is a positive step towards improving the rights and entitlements of lower-paid workers as well as providing transparency for customers.

“While most employers treat their staff fairly, this will help to stamp out bad practices where they exist and give customers the confidence that gratuities are paid to staff.”