A law to ensure that tips and gratuities are distributed fairly to staff working in sectors such as hospitality has been passed in both houses of the Oireachtas.

A statement from the Department of Enterprise, Trade & Employment said that consultations with employee and employer organisations would start shortly on the legislation.

This will lead to new regulations that will give effect to the Payment of Wages (Amendment) (Tips and Gratuities) Bill.

Policies must be displayed

The bill is aimed at providing clarity on the meaning of tips, gratuities, service charges, and mandatory charges.

It puts tips and gratuities outside the scope of a person’s contractual wages, and obliges employers to display “prominently” their policies on mandatory charges, and the distribution of cash and card tips.

The bill also obliges employers to distribute “fairly, equitably and in a transparent manner” tips that are received through debit or credit cards, or phones.

It will also ensure that any charge described as a ‘service charge’, or any other term that implies it is a charge for service, is distributed to employees in the same manner as tips received electronically.

Review after a year

“Most companies look after their staff very fairly, but this new law will stamp out bad practices where they do exist, and ensure that tips are distributed fairly among staff,” said Leo Varadkar (Tánaiste and Minister for Enterprise, Trade and Employment, pictured).

“It will also mean that tips received cannot be used as part of basic pay,” he added.

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

Electoral, sick-leave bills passed

Meanwhile, two other important pieces of legislation have passed through the Oireachtas this week.

The Electoral Reform Bill sets up a statutory, independent Electoral Commission, modernises the electoral registration process, and regulates online political advertising.

The Sick Leave Bill gives all workers the right to paid sick leave.

The new scheme will start with three days' paid sick leave per year, rising to five days in year two, and seven days in year three. Employers will eventually cover the cost of ten days in year four.