Payment of Wages (Amendment) (Tips and Gratuities) Bill 2022

July 19, 2022

Read about the recently published Tips and Gratuities Bill which provides further protection to employees in relation to the payment of wages. This Bill includes protection to a fair distribution of certain tips and gratuities and fair treatment of certain voluntary payments made to or left for employees and contract workers.

It was announced this month that the government will proceed to draft legislation that will regulate employer practices around tips and gratuities. This legislation will regulate employer practices around tips and gratuities. A minority of employers have been using tips to satisfy employee’s contractual rates of pay, which will not be allowed once the legislation is enacted. See more on the Workplace Relations Commission website.

While employers are not permitted to include tips in “gross pay” for National Minimum Wage calculations, there is no law prohibiting employers from including tips in the satisfaction of contractual rates of pay. The Government has now approved the proposal to make a change to the Payment of Wages Act which will make it illegal for employers to use tips to make-up or satisfy payment of contractual rates of pay.

The proposed amendments will also require employers to clearly display, for the benefit of workers and customers, their policy on how tips, gratuities and service charges are distributed.

It remains unclear at this point what employers will need to do to demonstrate that they have complied with the new measures. As the government has approved the draft Heads of Bill, the Minister’s department will draft the necessary legislation which is expected to commence pre-legislative scrutiny as soon as possible.

The hospitality sector will be closely monitoring the passage of the new law which should help clarify the legal obligations of hospitality sector employers and draw a line under recent media coverage into the treatment of tips.