Tips and Gratuities Bill

Tips and Gratuities Bill 2022

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022

The Tánaiste and Minster for Enterprise Trade and Employment, Leo Varadkar announced that on the 1st of December 2022, the Payment of Wages (Amendment) (Tips & Gradtuities) Act 2022 will come into effect making it illegal for an employer to make up an employee’s basic wage by using tips, gratuities or any form of ‘service charges’.


Why is this act being introduced?

The act has been introduced to provide employees with a legal entitlement to receive tips and gratuities in a fair, equitably and transparent manner. It also adds clarity on the meaning of tips, gratuities and service charges, and it compels employers to clearly display their tips and gratuities policies.


What does this mean for Employers?

There are four main obligations that employers should be aware of:

  1. Employers will be required to have a policy which clearly outlines how tips, either received from the customer by cash or card, are distributed.
  2. A notice must be clearly displayed for employees and customers to view detailing whether tips are distributed among employees. If they are distributed, it should clearly outline how they are distributed along with amounts.
  3. An employer is legally obliged to produce a written statement to employees detailing the distribution of tips and gratuities within 10 days of distribution.
  4. The Terms of Employment (Information) Act 1994 will be amended to make it an employer’s responsibility to include in the written statement provided to the employee within 5 days of commencement of employment, how tips, gratuities and service charges are distributed.


How tips or gratuities must be distributed

Tips received electronically must be distributed to employees fairly and in a transparent way. When deciding how to distribute tips, employers may consider the following factors:

  • Seniority or experience of employee
  • The value of sales generated by the employee
  • The number of hours worked by the employee


Naturally these additional requirements will add a considerable amount to the workload of many hospitality employers and their payroll departments, but our Tronc master service can significantly lighten that burden. Our Tronc Masters Service has been specifically created to relieve the burden of managing and distributing gratuities while ensuring your employees receive their tips fairly and cost effectively without undue costs to your business. To find out more visit our  Tips and Gratuities Management Page or Request a Callback today.


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