Doherty Moves to Stop Employers Using Tips to Top Up Wages

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Doherty Moves to Stop Employers Using Tips to Top Up Wages
New Measures Also Introduce Requirement for All Premises to
Publicly Display Tipping Policy
Tuesday, 18 June, 2019: The Minister for Employment Affairs and Social Protection, Regina Doherty T.D. today emphasised that the new measures she is bringing to Government shortly, in relation to Tips and Gratuities, are the most realistic option for ensuring fairness and transparency for low paid staff and customers alike. The Minister was speaking ahead of a Second Stage reading in the Dáil of an opposition Bill on the matter.
The Minister proposes:
  • To amend the Payment of Wages Act to ensure that tips and gratuities cannot be used to ‘make-up’ or satisfy a person’s contractual wages; and
  • To provide for a requirement on employers to clearly display, for the benefit of workers and customers, their policy on how tips, gratuities and service charges are distributed.
Regarding this approach, the Minister said:
“I wish to build on the advances I have already made with my recent Employment Act which helped low paid workers and workers in precarious employment. I believe that this approach to tips and gratuities will support workers and avoid the downsides for workers identified by the Low Pay Commission in their recent report where they recommended against primary legislation on this matter. My approach is about doing what’s possible, not what’s populist.”
On the opposition Bill, Minister Doherty emphasised that the proposed legislation was flawed. She cited the Low Pay Commission’s findings late last year where they reported:
  • Legislation or regulation should not be introduced in this area as it could be unworkable and unenforceable;
  • It also found there could be unintended negative consequences for low paid workers such as the reclassification of service charges, leading to a potential reduction in their take home pay;
  • The Commission stated that because tips are paid in a variety of different sectors and contexts, this type of ‘one-size-fits-all’ approach in the Private Members’ Bill is not recommended.

The Minister added:

“I note that, in submissions to the Low Pay Commission on this matter, the Green Party argued that it would be extremely unlikely that the State could provide the level of inspection and enforcement required to make the Bill effective and Fianna Fáil  submitted to the Low Pay Commission that the State shouldn’t create more bureaucracy in an area that doesn’t warrant it. If those are their honestly held opinions, I expect that they will support the more realistic approach set out in my proposals.
“Just like I did with the Employment Act 2018 - when I restricted zero hours contracts and introduced banded hours contracts - I will continue to try to make any advances I can in relation to the employment rights of low paid and precarious workers because workers in the service industry and low-paid jobs deserve real support rather than posturing.” 
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Last modified:18/06/2019