NEW ON-THE-spot fines for businesses found breaching rules surrounding tips are set to be introduced.

Minister of State for Business, Employment and Retail Neale Richmond announced the new rules, which are outlined in the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022. The Act came into effect on 1 December last year.

The Act gives employees a legal entitlement to receive tips and gratuities paid in electronic form – such as through debit, credit cards or smart phones.

It also bans employers from describing mandatory charges as “service charges” unless they are treated in the same way as tips or gratuities.

Employers who do not provide employees with their terms of employment or provide false information will receive a fine of €1,500.

Employers 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.

Meanwhile, if employers do not display a ‘tips and gratuities notice’ or a ‘contract Workers Tips and Gratuities Notice’, they will be fined €500. 

Inspectors from the Workplace Relations Commission (WRC) will visit premises around the country to see if they are in line with the legislation on tips. If they find a breach, they can issue a fine.

The Department said that in order to encourage employers to work with the legislation, if the fine is paid, no further action will be taken.

However, if the fine is not paid, the business in question will be referred to the WRC’s internal legal affairs committee who will then decide whether to proceed with prosecution.

Legislation requires the Minister for Enterprise, Trade and Employment to review the Act after it has been in effect for one year.

Preparatory work on the review is underway within the Department, which will then inform the effectiveness of the measures and whether further measures are warranted.

Minister Richmond said that tips are an important aspect of the hospitality industry.

“Protections of tips introduced last year ensure that those who earn the tips are the ones to benefit from them,” he said.

He said that 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”. 

“We believe in putting money back into people’s pockets, this includes allowing workers to keep their hard-earned tips,” he added.

“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.”