Payment of Wages (Tips and Gratuities) Act
2022 legislation regulating how tips are distributed and prohibiting employers from using tips to make up basic wages.
You must display a "Tips Notice" explaining your policy to customers. Electronic tips must be distributed fairly to staff. Service charges are now legally treated as tips and cannot be retained by the business as revenue.
Frequently Asked Questions
The law requires that electronic tips must be distributed to employees no later than 10 days after the end of the period in which they were collected. You cannot hold onto tips for months; they must be processed and paid reasonably quickly to ensure transparency.
Yes. Since the 2022 Act came into force, all businesses that allow tipping (cash or card) must prominently display a "Tips and Gratuities Notice" stating how tips are distributed (e.g., "100% of tips are shared equally among staff"). Failure to display this notice is an offence that can trigger a WRC inspection and fines.
No. The Act strictly prohibits using tips or gratuities to satisfy basic wage requirements. Tips are considered a gift from the customer to the staff and must be treated as additional income. You must pay the statutory National Minimum Wage (or the contracted rate) first, and tips are added on top of that.