Insights Blog

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 came into effect on 1 December 2022. The Act contains a number of new provisions regulating the way in which employers in a number of sectors including hospitality must distribute tips, gratuities and service charges amongst employees.

A summary of the key provisions in the Act is set out below:

  • Tips and gratuities cannot form part of an employee’s contractual wages.
  • Electronic tips and gratuities (e.g. paid by debit or credit card or smart phone) must be distributed fairly and transparently amongst employees.
  • An employer cannot retain a share of, or make any deductions from, electronic tips or gratuities save in limited circumstances.
  • Any charge described as a “service charge” or which would lead customers to believe that it is a mandatory charge to be distributed to employees, must be distributed in the same way as other electronic tips and gratuities.
  • An employee must receive a written statement detailing the total amount of tips paid to them as well as the total amount distributed by their employer for the period covered by the statement. The statement must be given within 10 days from the date of distribution of tips.
  • Employers must clearly display a policy on how cash and electronic tips, gratuities and service charges are distributed both to direct employees and contractors including platform workers.
  • Any introduction of, or material change to, an employer’s policy on tips or gratuities or the treatment of mandatory charges has to be carried out in consultation with employees.
  • Employees can make a complaint to the Workplace Relations Commission that electronic tips and gratuities were not distributed fairly or that the employer unlawfully retained a share of electronic tips and gratuities.
  • The WRC can also inspect businesses to ensure compliance and employers can be fined up to €2,500 if convicted for a breach of the legislation.

Our detailed briefing on the Act is available HERE.