LEGISLATION MAKING changes to the way staff are tipped in Ireland has been introduced in the Seanad, effectively banning 'service charges' unless the money goes directly to staff.
The new law, the Payment of Wages Bill, is expected to prevent employers from using tips or gratuities to make basic wages, and introduce transparency about how tips and service charges are distributed.
Speaking about the Bill, Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar said:
“Our overall objective with the Bill is to prevent employers from using tips or gratuities to make up basic wages and to introduce transparency about how tips and service charges are distributed.
“Customers really can’t be sure what services charges are used for or whom they go to. Voluntary services charges are clearly the same as a tip or a gratuity but by definition, mandatory service charges are not.
“As things stand, you’re expected to pay, without any information on where the money goes. I’m happy we’ve been able to come up with a solution now, which will effectively ban employers from using the term ‘service charge’ or any similar term, unless the money goes straight to staff.
“Employers must be explicit about any additional charge and where it goes, once this new law comes into force.”
Fine Gael’s junior Minister Business, Employment and Retail, Damien English will introduce the changes in the Seanad on Wednesday.
These will rename “mandatory service charges” as “mandatory charges”, and prohibit classes of employer prescribed by regulations made by the Minister from describing a mandatory charge applied to customers as a “service charge” or any similar term, for example ‘service levy’ unless those payments are treated by the employer in the same way as electronic tips or gratuities.
Any additional charges that are not going to staff must then be explicit on receipts.
See More: Leo Varadkar, Service Charges
