Government approves the drafting of a law that will protect employees' tips

The Tánaiste and Minister for Enterprise Trade and Employment, Leo Varadkar TD, announced on Wednesday 27 October that he had received Government approval to draft a law that will give new rights to employees, prohibiting the use of tips and gratuities to ‘make up’ contractual rates of pay.


When the proposed new legislation comes into force, there will be new requirements on employers to clearly display their policy on how both card and cash tips, gratuities and service charges are distributed. Employers will be required to keep a record of how tips and gratuities (including electronic tips) are distributed in the event of there being a complaint. The records will be available for inspection by the Workplace Relations Commission.


The aim of the Payment of Wages (Amendment) (Tips and Gratuities) Bill is to:  

  • Provide clarity on the meaning of tips, gratuities and service charges 
  • Place tips and gratuities, but not service charges, outside the scope of a person’s contractual wages 
  • Oblige employers to display prominently their policy on the distribution of both cash and card tips 
  • Oblige employers to distribute fairly, equitably and in a transparent manner, tips that are received in electronic form, that is, through debit or credit cards or smart phones   

The Tánaiste reported that “This new law will, for the first time, give workers 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”. Making the announcement, he observed that 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.


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