New tipping law comes into effect on 1 December

New rules about how employers in Ireland share tips, gratuities and service charges amongst employees will be in place from the beginning of next month.

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 became law on 20 July 2022, and comes into effect on 1 December.

Long associated with the hospitality sector, a tip or gratuity is a payment made by a customer, which they assumed would be kept by the employee or shared with other employees. Tipping is also common practice in the hair and beauty industry.

The Act introduces makes it illegal for employers to use tips or gratuities to make up basic wages. It will also give staff and employees a legal requirement to receive tips and gratuities paid in electronic form.

Furthermore, any charge called a service charge, or a charge which would lead a customer to believe it is for service, will now have to be distributed to staff as if it were a tip. 

The legislation will be reviewed after one year to assess its effectiveness, and to decide if further measures are needed.

"Tips can form a significant percentage of a worker’s take-home pay, and these changes go a long way to ensuring those tips are distributed to the people who have earned them,” said Tánaiste Leo Varadkar.

"This new law is a positive step towards improving the rights and entitlements of lower-paid workers as well as providing transparency for customers. While most employers treat their staff fairly, this will help to stamp out bad practices where they exist and give customers the confidence that gratuities are paid to staff.”