Protecting Employees’ Tips

Peter McSherry
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In the last month, a number of employment and labour legislation issues have made the news. One of the major items was the province’s decision to ban employers from taking a cut of tips that are meant for servers and other hospitality service workers. On December 7, 2015, Bill 12, the Protecting Employees’ Tips Act, passed third reading in the legislature. The Act makes it illegal to withhold employees’ tips except in the temporary case where employees pool their gratuities to be redistributed amongst all employees. The other exception is for employers who regularly do a “substantial degree” of the same work as the employees, such as an owner waiting tables in a small restaurant. Those employers are permitted by the law to share in the tips. Bill 12 will also amend the Employment Standards Act to allow the Ministry of Labour to collect stolen tips from employers as though they were unpaid wages.

Other provinces, such as Quebec, New Brunswick, Newfoundland and Prince Edward Island, already have similar legislation in place. In Ontario, the Bill has been put forward several times since 2011 but until now, has failed to pass through the legislature.

According to service industry insiders, tip theft is a growing problem that often makes it difficult for low-wage workers to survive. But others say the practice of takings employee tips is not common in the hospitality industry, with only a small minority of employers taking a portion of their employees’ tips. However, it is a big enough problem that servers do complain about it.

Although the Protecting Employees’ Tips Act is a necessary and welcome change to Ontario’s workplace laws, it will be up to employees to ensure that they keep track of the quantity of tips they have earned each shift and to file claims with the Ministry of Labour if their employer does not obey the law. Proper enforcement of the bill by the Ministry will also be key to protecting vulnerable servers.

To find out more about how Bill 12 will affect you, contact employment lawyer Peter McSherry online or at 519-821-5465.