Only one food service business fined under new staff tips legislation

Just one fine has been issued to a restaurant or hospitality business under legislation designed to regulate and safeguard staff tips and gratuities since its enactment two years ago.

The 2022 Payment of Wages (Amendment) Act came about on foot of anecdotal evidence that some employers, particularly in food service, were using staff tips as a means of meeting their payroll obligations and other overheads. A lack of legislation meant employers were not obliged to pass on tips to their staff, and customers who left them had no formal way of knowing where their money went.

“While most employers treat their staff well there were examples where some tips were simply included as part of overall business income or used to contribute to employees’ contractual base wages,” noted a recently published Department of Enterprise statutory review of the law in operation.

The Payment of Wages Act was enacted in July 2022, covering electronic tips and took force the following December. It clarifies the meaning of tips, gratuities and service charges, placing them outside the scope of contractual wages. It also obliges employers to display their policy “prominently” on the distribution of both cash and card tips.

A spokeswoman for the department said that since the introduction of the regulations the inspectorate and enforcement services division of the Workplace Relations Commission (WRC) has issued one fixed payment notice in respect of a failure by a Dublin-based employer to display a tips and gratuities notice. The WRC has been tasked with overseeing the new rules.

She said employers were given “all reasonable opportunity” to rectify contraventions of employment law, and fines or legal proceedings were issued in cases where “an employer has failed or is unwilling to effect compliance”.

The Restaurants Association of Ireland, noting the single recorded fine, said it was satisfied with how the legislation had been embraced by its members. “Only one breach of the legislation is extremely good,” its chief executive Adrian Cummins said. “That just shows that the legislation is working…what’s not broken you don’t have to fix.”

Although welcoming the legislation the trade union Unite, which represents many service staff, previously told the department’s review process that it hoped it would address “some of the enforcement issues that are preventing [its] full impact”.

The department said the legislation had broadly met its objectives. It is to consult the WRC to produce an agreed standard display notice template.