Government legislation 'does nothing to ensure tips are retained in full by employees'

The Government has rejected criticism that new laws being drawn up regarding employee tips will fail to stop businesses denying their employees tips.

One, an organisation representing trade unions and student unions in Cork and Galway, says the Government’s efforts to block a Sinn Féin bill on workers’ tips in favour of drafting its own legislation will not address concerns over businesses who do not hand over tips received by staff during shifts.

Minister for Employment Affairs and Social Protection Regina Doherty has received Government approval on a draft heads of the bill which will regulate practices around tips and gratuities.

The amendment to the Payment of Wages Act will ban employees from using tips or service charges to make up employees’ wages or salaries, as well as requiring restaurants, hotels and other outlets to clearly display their policy on the distribution of tips and service charges.

However, the Government has been criticised for blocking a Sinn Féin bill which the Department of Social Protection says is “totally unworkable” and would lead to “negative consequences” for employees in the restaurant industry.

Ms Doherty said in the Dáil last month that the Sinn Féin bill could lead to taxation on tips, employees losing social welfare entitlements take-home pay being reduced. The Government has also tied a ‘money message’ to the bill, meaning it has been flagged as having potential cost implications for the State.

Fiona Dunne, national co-ordinator of One, criticised the Government’s legislation, saying it “does nothing to ensure tips are retained in full by employees".

She rejected the suggestion that the bill would affect tax liabilities, saying workers’ wages and hours are already so low that they are barely registering in a tax bracket.

“There seems to be a mantra from the Government at the moment of dissuading low-paid workers from looking for what they’re entitled to by saying they might come out worse off," Ms Dunne said.

This is Minister Regina Doherty having to be seen to be doing something, and this is the bare minimum.

Ms Doherty said the Sinn Féin bill had several issues, and that she is being guided by the Low Pay Commission, an independent body which recommended against using new legislation to solve issues of employers withholding tips.

She said the Government's legislation would avoid the pitfalls described by the Commission, adding: "This is about doing what’s possible, not what’s populist."

“If I can place tips and gratuities firmly outside calculation of a person’s contractual wages and bring transparency to how tips are distributed, I believe this will go a long way to assisting the people we all want to assist.”

The Department of Social Protection is expected to move forward with drafting the bill in the coming weeks.