Tips & Gratuities
Purpose of the Act
The purpose of the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 is
- provide clarity on the meaning of tips, gratuities and mandatory service charges;
- place tips and gratuities, but not mandatory service charges, outside the scope of a person’s contractual wages;
- oblige employers to display prominently their policy on the distribution of tips;
- oblige employers to distribute fairly and in a transparent manner, tips that are received in electronic form e. through debit or credit cards;
- otherwise leave the status quo in relation to mandatory service charges forming part of the revenue of a business.
The Minister may make regulations to prescribe the employers or class of employers to which the Act will apply. The Minister may prescribe by regulation an employer or a class of employers, to which the provisions do not apply.
Basic Rights
Employers are required to distribute fairly and in a transparent manner, tips that are received in cash or electronic form through debit or credit cards.
Employers may not retain any share of tips or gratuities received by the employer electronically,
- unless such retention is required or permitted by the Act, or
- where he or she regularly performs to a substantial degree the same work performed by some or all of the employees, such amount which is fair and reasonable in the circumstances.
Distribution
In considering a complaint under the Workplace Relations Act regarding whether a distribution of tips and gratuities to an employee is fair, an adjudication officer of the Workplace Relations Commission shall have regard to all of the factors or circumstances that he or she considers relevant, including:
- the seniority or experience of the employee;
- the value of sales, income or revenue generated for the business by the employee;
- the proportion or number of hours worked by the employee during the pay period in which the tip or gratuity was made;
- whether the employee is on a full-time or part-time contract of employment;
- the role and influence of the employee in providing a service to customers;
- whether the employee was consulted in relation to the manner of distribution;
- whether there is an agreement, whether formal or informal, between the employer and the employee providing for the manner in which tips and gratuities are to be distributed.
To aid transparency in the distribution of tips, an employer must no later than 10 days from the date on which a distribution of tips and gratuities is made, give to an employee a statement in writing specifying the total amount of tips and gratuities distributed by the employer for the period to which the statement relates, and the amount of tips and gratuities distributed to the employee to whom the statement is provided.
An employer shall, before establishing or making a material change to its policy on the manner in which tips or gratuities will be distributed among employees, or on the way in which mandatory service charges will be treated, consult with those employees.
Deductions Restricted
An employer cannot make a deduction from an employee’s wages in respect of tips or gratuities made to, or left for, an employee, or make a deduction from an employee’s tips or other gratuities other than–
- as required by the Act, by any statute or by any instrument made under statute, or
- to the extent required in order to meet costs directly arising from providing electronic modes of payment for tips.
Display & Information
The employer must display a ‘Tips and Gratuities Notice’ stating whether or not tips or gratuities are distributed to and amongst employees, the manner in which they are distributed and the amounts so distributed, and also whether services charges, or any portion of them, are distributed to and amongst employees, and if so, the manner in which they are distributed and the amounts so distributed.
The Minister may by regulations prescribe:
- the particulars of the information that shall be contained in a tips and gratuities notice, and any
- further or additional information relating to tips and gratuities or mandatory service charges that shall be contained in a tips and gratuities notice,
- the manner in which, or particular locations at which (including on a website or other online digital platform hosted by the employer, or at the place of business at which employees perform their work or service), a tips and gratuities notice shall be displayed.
It must be in such a position, form and manner as to be capable of being easily read by consumers”.
Contract Worker Tips
A “Contract worker” is as a natural person who carries out work other than as an employee, including on a contract for service, for a person to whom this section applies.
Prescribed persons (e.g., businesses that contract with platform workers who are not direct employees but whose work typically attracts tips and gratuities) must display a ‘Contract Workers Tips and Gratuities Notice’ . The notice must state
- whether or not tips or gratuities are distributed to and amongst ‘contract workers’,
- the manner in which they are distributed and the amounts so distributed, and also
- whether services charges, or any portion of them, are distributed to and amongst ‘contract workers’, and if so,
- the manner in which they are distributed and the amounts so distributed.
The Minister may by regulations prescribe, either generally or in relation to particular persons to whom this section applies–
- the particulars of the information that shall be contained in a tips and gratuities notice, and any
- further or additional information relating to tips and gratuities or mandatory service charges that shall be contained in a tips and gratuities notice,
- the manner in which, or particular locations at which (including on a website or other online digital platform hosted by the employer, or at the place of business at which employees perform their work or service), a tips and gratuities notice shall be displayed.
The statement regarding the employer’s policy on the manner in which tips or gratuities and mandatory service charges are treated will become part of the core terms that a new employee is to be furnished with within 5 days of commencing employment.
WRC
An adjudication officer of the Workplace Relations Commission (WRC) to direct an employer to repay any unlawful deduction of tips or gratuities, arising from a complaint being made to the WRC.
The Workplace Relations Commission (WRC) may carry out inspections and to take complaints regarding compliance with the new requirements set out in the Act.
Business Covered
The main provisions of the Act apply to
- The sale of beverages (including intoxicating liquor) or food for consumption on the premises at which such beverage or food is sold.
- The sale of beverages (including intoxicating liquor) or food by means of casual trading (within the meaning of section 2 of the Casual Trading Act 1995)).
- The accommodation of overnight guests on a commercial basis in a hotel, guesthouse, hostel, bed and breakfast, self-catering accommodation facility or any similar accommodation facility.
- Providing guided tours.
- The provision of services relating to gaming in a manner authorised by the Gaming and Lotteries Act at a premises that is used primarily for the provision of such services.
- The provision of services as a licensed bookmakers
They apply to carrying out non-surgical cosmetic procedures including the following:
- cosmetic nail care;
- nail styling;
- hair care;
- hair styling;
- tattoo services;
- piercing services;
- skin care services.
The apply to providing transport services by means of a public service vehicle other than the following:
- services provided under a public transport services contract
- services provided under a public bus passenger service licence
- services provided exclusively for carrying children to or from a school.
Digital Services
The Act applies to a person who controls, manages, directs or is otherwise responsible, directly or indirectly, for an online digital platform by which natural persons may, wholly or mainly for purposes unrelated to the natural person’s trade, business or profession, access a service referred to, allows such natural persons to use the online digital platform to pay a tip or gratuity, and engages contract workers to provide the relevant service.
These categories are prescribed as persons to whom the Tips and Gratuities legislation applies.
This cover (2023)
- Ordering beverages (including intoxicating liquor) or food for delivery to a place other than the premises at which such beverage or such food is prepared or stocked.
Providing transport by means of a public service vehicle.