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New law to better regulate tipping, says Varadkar

The Government is set to introduce legislation that will give legal protection to workers’ tips.

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A sign for seating at a restaurant in Dublin’s city centre (Brian Lawless/PA)

A sign for seating at a restaurant in Dublin’s city centre (Brian Lawless/PA)

A sign for seating at a restaurant in Dublin’s city centre (Brian Lawless/PA)

The Government is set to introduce legislation that will give improved legal protection to workers’ tips.

Leo Varadkar said on Wednesday that the Cabinet had given approval to proposed legislation that would stop tips being used by employers to partly cover wages.

This law should be in place for next year, he said.

The Tanaiste admitted that plans to address the issue had been interrupted by both the calling of a general election in early 2020 and the onset of the Covid-19 pandemic.

He said that now was a good time to better regulate tipping in the hospitality industry and “reignite” the legislation.

“The pandemic has changed things.

“More and more people are paying electronically,” he told reporters.

“If you pay the minimum wage, you can’t use tips to cover part of that.

“But if for example, you pay 13 or 14 euros an hour, you can use tips as part of that hourly payment.

“That won’t be allowed anymore.”

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“Restaurants will have to inform customers what their tips policy is.

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A waiter sets a table (Damien Eagers/PA)

A waiter sets a table (Damien Eagers/PA)

A waiter sets a table (Damien Eagers/PA)

“Where tips are paid in electronic form, that there’s legal obligation on the employer to make sure that that money goes to the workers is distributed in a fair and equitable manner.

“What this is all about is protecting the pay that workers get, that you can’t use tips to make your minimum pay rates, any pay rate for that matter.”

Mr Varadkar said that there was “some evidence” that tipping was being abused by some employers.

“We don’t think it’s widespread.

“But there is some evidence of some businesses not passing on tips to workers and very strong evidence that the public aren’t clear as to what happens.”

He described it as a “small piece of legislation, but an important one”.

Mr Varadkar said that the Cabinet had also backed a proposal to draft legislation to ensure that the time spent on the Pandemic Unemployment Payment will count towards a redundancy lump sum for workers.

He also said that Finance Minister Paschal Donohoe had guaranteed that the lump sum would not be taxed.

That legislation, Mr Varadkar said, would be ready by the end of the year.


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