New laws that regulate the practice of tips come into force, giving a boost to the rights of workers.
Under the Wages Payment Act, employees now have the legal right to receive tips and gratuities paid electronically.
The new law also requires that this money be paid to workers fairly.
It will also make tips, bonuses and service charges illegal as part of an employee’s base salary.
The rules also require that any charge called a “service charge” or anything that would lead a customer to believe is a service charge shall be distributed to staff as if it were a gratuity or a gratuity received by electronic means.
However, the distribution of tips can take into account several factors.
These include the seniority or experience of an employee, the value of sales they generate, or the number of hours worked.
Under the regulation, employers will be required to display information on how tips, gratuities and mandatory expenses are shared or distributed among staff.
The main sectors to which the measures will apply are tourism, hospitality, hairdressers, taxis and delivery services.
However, more may be added to the list in the future as new areas of tipping become more prevalent in the economy.
The legislation was supported by Tanaiste and the Minister of Business, Commerce and Unemployment, Leo Varadkar.
His successor in that ministry after the change of government on December 17 is obliged, under the new law, to review the legislation after it has been in force for a year.
This will allow the government to assess the effectiveness of the measures and decide if further steps are needed.
The Chief Executive of the Irish Restaurant Association said he was concerned that new tipping laws for hospitality workers would result in lower wages for many in the industry.
Adrian Cummins said the new law, which governs electronic tips, will mean hospitality staff will have to pay tax on tips and employers will be subject to PRSI.
The group will lobby the government in the coming months to push for tips for industry staff to be tax-free, Cummins said.
This is echoed by recruitment specialist Excel Recruitment, which is calling on the government to increase the incomes of the lowest paid workers in sectors such as beauty and hospitality by removing tips, or a certain amount of tips, from the tax net.
This, he argues, would encourage more workers to return to hospitality and other low-wage industries.
“All tips received by staff are currently taxable,” said Shane McLave of Excel Recruitment, reports RTE.
The Irish Trades Union Congress has said the new legislation means employers must have and display a policy on how tips are divided and distributed among staff, and it is important that employees are aware of this.
Speaking to RTÉ’s News at One, ICTU’s Fiona Dunne said employers often retained the service charge but now have to pay it back to workers.
She also said that this doesn’t change tax rules and that “20% of 100% tips is more than 100% of zero” anyway.
“This is the lowest paid sector in the country and tipping is just one element that we worked on in terms of inequality,” she said, reports RTE.
Regulation well received by restaurant workers in Galway
The new regulations were welcomed by catering workers RTÉ News spoke to in Galway today.
While Leah Nolan’s employer already makes sure tips go directly to staff, she thinks it’s good for customers to be clear too “because we get asked very often where our tips go”, reports RTE.
According to RTE, café manager, Hazel Bradley also agrees: “The first I heard of it was this morning on the radio on the way into work and that we have to legally display a sign, letting customers know what we do with the tips. Here, they’re divided evenly amongst all staff. The owner or higher-up management don’t take anything all the floor staff and kitchen staff get an even amount. I think customers are more comfortable tipping when they know that it’s going directly to the staff.”
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