Irish Government announces new law on distribution of tips

The Irish Government has announced plans to introduce a new law to protect employees’ tips and and to provide transparency to customers on tips.

The Hair and Beauty Industry Confederation (Habic) has drawn attention to the new law, which will be relevant to those working in the Irish hair and beauty industry, where tipping is a common practice.

With an increasing amount of consumers paying for services electronically, research has shown that there is confusion as to how tips they add to their bill are distributed. 

This new law will come into place next year as an Amendment to the Payment of Wages Bill, with the aim of providing clarity on the meaning of tips, gratuities and service charges; placing tips and gratuities, but not service charges, outside the scope of a person’s contractual wages; obliging employers to display prominently their policy on the distribution of both cash and card tips; and obliging employers to distribute fairly, equitably and in a transparent manner, tips that are received in electronic form, that is, through debit or credit cards or smartphones.

“This new law will, for the first time, give workers legal protections over tips,” said  Tánaiste and Minister for Enterprise Trade and Employment Leo Varadkar. “It will mean that any tips received cannot be counted towards an employee’s basic pay, they must be counted as additional and separate.  

“I know many people are sometimes unsure how or if tips and service charges are distributed, especially when paying by card or phone. Once this law is enacted, all employers will be required to show clearly how tips and service charges are dealt with in a business. This will provide clarity for both customers and staff. 

“Most establishments already treat their employees fairly with regard to tips, so for many it will mean no change other than having to display their policy clearly.”