Tánaiste Leo Varadkar announced a new law that will affect the Irish Hospitality sector. The law will ensure that service charges in restaurants and bars go directly to workers.
This legislation will be brought forward as part of the Payments of Wages Tip and Gratuities Bill in Ireland.
What does this new law mean?
- Customers will no longer be asked to pay mandatory service charges at restaurants or pubs.
- Employers are banned from placing a mandatory service charge unless those payments are treated by the employer in the same way as electronic tips or gratuities.
- All service charges in restaurants and bars go directly to workers.
Tánaiste Leo Varadkar had this to say on the matter: “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.”
He added: “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.”