On-the-spot fines introduced for employers breaching tipping legislation

A system of on-the-spot fines for employers in the hospitality sector who breach the tipping legislation introduced last year has been announced.

Under the new rules, which come into effect immediately, inspectors from the Workplace Relations Commission (WRC) who find breaches of the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 during an inspection of a restaurant, bar or other establishment can impose immediate fines of up to €1,500.

Previously, employers were liable to fines of up to €2,500 but a prosecution resulting in a summary conviction in the District Court had to be taken by officials at the WRC.

That option will still be available but employers who pay the initial fine will not be liable to further action.

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Under the changes announced by Minister of State for Business Neale Richmond on Friday employers who either do not provide employees with their terms of employment or provide false information will be liable to a fine of €1,500.

Those who fail to provide employees with a written statement on the distribution of tips and gratuities or fail to treat a service charge as a tip will be subject to a fine of €750.

And employers who do not display a “tips and gratuities notice” or a “contract workers tips and gratuities notice”, will be fined €500. The latter notice relates to platform workers ostensibly working for the likes of Deliveroo or Just Eats.

“While the majority of employers are in compliance with rules and regulations surrounding the treatment of tips, the introduction of these fines provides another layer of protection for hospitality workers and will help to stamp out bad practices where they exist,” said Mr Richmond.

“Not only do the workers deserve to keep the tips they earn, but customers who are paying these tips deserve to know where their money is going.”

The original legislation came into effect on December 1st, 2022, with compliance policed by the WRC’s inspectors.

Up to the end of November 4,270 inspections had been carried out with 393 breaches found to have occurred.

Of those, 369 related to a failure to properly display a policy on the distribution of tips and gratuities in line with the requirement of the legislation while the remaining 24 related to a failure to provide adequate statements to employees outlining how tips and gratuities received during a given period had been distributed.

Adrian Cummins of the Restaurants Association of Ireland said earlier this month that many of the breaches related to minor problems over the precise wording used in notices.

“What I was thankful for was that they [WRC inspectors] didn’t find that there were businesses withholding any tips, gratuities or service charges from staff, and I haven’t heard of it at all across the industry over the last 12 months or more since the legislation came in; that’s very positive” he said.

Preparatory work on a wider review of the legislation which was required after it had been in operation for the year is under way according to the Department of Employment.

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