Workers’ tips set to be protected under new law

Cabinet approves drafting of two new laws aimed at boosting workers’ rights

Workers’ tips will be protected under a new law to be drawn up in the coming months. Photograph: iStock

Workers’ tips will be protected under a new law to be drawn up in the coming months. Photograph: iStock


Workers’ tips will be protected and restaurant customers will know how service charges are used under a new law to be drawn up in the coming months.

The Cabinet has approved the drafting of two laws aimed at advancing workers’ rights.

Tánaiste and Minister for Enterprise Leo Varadkar on Wednesday outlined the proposed new rules in relation to how tips are handled by businesses.

He also gave details of separate planned legislation to protect any future redundancy lump sum for people who have been in receipt of the pandemic unemployment payment (PUP).

Mr Varadkar said the new law on tipping is being developed as there is evidence of some businesses not passing on tips to workers, although he said this is not believed to be widespread.

There had been plans to bring in the law to protect people’s tips in the last government but they “fell by the wayside” due to the election and the pandemic, he said.

The Government has approved the drafting of the legislation, which he hopes will be enacted in “the next couple of months”, he added.

The legislation is to do three things.

The first is to ensure employers cannot use tips to top up wages.

Currently this is not allowed when the worker is being paid the minimum wage, but is not outlawed when they are on a higher hourly rate.

Secondly the legislation will provide transparency for customers on how service charges and tips are used.

Mr Varadkar said service charges are currently a “murky area” and “sometimes it’s passed on to staff, sometimes it is not.

“So people will get clarity around that when they’re paying their bill.”

Thirdly there will be a legal obligation on employers to make sure tips paid electronically are passed on to workers “in a fair and equitable manner”.

Redundancy legislation

Meanwhile, Mr Varadkar said the redundancy legislation is to ensure that if people were on the PUP for a period of time, that this time will still count towards any future redundancy lump sum.

He said this lump sum will not be taxed and it is hoped a scheme to implement the legislation will be in place next year.

The cost will be covered by the Social Insurance Fund, not employers.

The two laws are part of a “whole package of legislation to improve workers’ terms and conditions in Ireland”, he noted, giving examples of other legislation related to sick pay, the right to disconnect, and the right to request remote working as measures that are “now in train”.

Labour Party Senator Marie Sherlock, the party’s spokeswoman on employment affairs, said that while the tips proposal is “well intentioned”, the announcement “is another in a long list of Government promises on workers’ rights”.

She criticised the progress of paid sick leave legislation, and said: “Perhaps Government time may be better spent following through on long-standing legislative commitments instead of giving workers false hope of accessing new improved rights any time soon.”