Leo Varadkar (Dublin West, Fine Gael)
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The Payment of Wages (Amendment) (Tips and Gratuities) Bill 2022 (No 5 of 2022) was published on 24 January 2022.

The Bill will provide clarity on the meaning of tips, gratuities and service charges; place tips and gratuities 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; and oblige employers to distribute fairly and in a transparent manner, tips that are received in electronic form i.e. through debit or credit cards or smart phones.

However, there will be no other regulation of ‘cash tips’ as this is, according to the Workplace Relations Commission, ‘’unenforceable’. Cash tips are not always under the control of the employer.

In its current published form, the Bill does not change the position that mandatory service charges levied by a business (as distinct from voluntary and discretionary tips and gratuities) are part of business revenues and as such can be applied to meet any or all business costs, including salaries. Discretionary service charges, however, will fall within the Bill’s definition of ‘tips and gratuities’, and the Bill will apply to these types of voluntary customer payments.

The Bill completed Seanad 2nd Stage on 1st February last, at which session I undertook to reconsider the treatment of service charges in the Bill. I am currently examining the relevant issues and potential implications.