The Payment of Wages (Amendment) (Tips and Gratuities) Bill 2022 (the Bill), which will prevent employers from using tips or gratuities to “make up” basic wages, passed the second stage of Seanad Éireann on 29 June 2022.
Currently under Irish law, there is nothing preventing an employer from imposing a mandatory service charge on customers, which it can then use to make up the basic wages of staff. If passed, the Bill will prohibit the use of such tips to ‘make up’ contractual entitlements to pay employees.
Additionally, the Bill will impose new requirements on employers to clearly display their policy on tips and service for customers in terms of how they are distributed (including those received in electronic form through debit or credit cards). In its current form, the Bill will also prohibit employers from using the term ‘service charge’ or any similar term, unless the money goes directly to staff.
The Bill now faces several more stages and debate before it can become law. Once it does become law however, employers will have to be explicit with customers about additional charges and about where the money goes.
To ensure you are ready for this change, businesses and organisations are advised to monitor this Bill closely as it continues to progress through the legislative process.
How Can We Help You?
For more information on employment related matters please contact Catherine O’Flynn or your usual William Fry contact.
See Payment of Wages (Amendment) (Tips and Gratuities) Bill 2022 here.