Employers must fairly distribute employee tips and gratuities in accordance with the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022.

The Complainant worked as floor staff at Karen’s Diner for two months. Their complaint concerned the non-payment of both electronic and cash tips during their employment. Specifically, the Complainant alleges that electronic tips accrued throughout their entire employment were withheld and never distributed; cash tips from the final week of employment were also not paid; and they were repeatedly assured by the respondent that electronic tips would be paid, but this did not happen. The Respondent did not attend the hearing.

The Adjudicating Officer found that although the Complainant provided uncontested evidence that electronic tips were collected but never distributed, the claim for those tips was deemed out of time under section 41(6) of the Workplace Relations Act 2015. The complainant had filed a collective complaint initially and only realised in October 2024 that an individual complaint was required. The Adjudication Officer held that this delay did not constitute “reasonable cause,” noting the Complainant had access to the relevant information and avenues to file a complaint within the six-month statutory window. However, the Complaint regarding unpaid cash tips for the final week of work was submitted in time. The Complainant credibly stated they had received between €80–€100 in cash tips weekly, and the final payslip showed a nil amount for tips. The Adjudication Officer found that non-payment of these tips constituted an unlawful deduction under section 4C of the 1991 Act, breaching the statutory protection of employee gratuities. They ruled the complaint was partially well founded, awarding the complainant €200 in compensation, the amount being limited to the estimated lost tips for the final week.

Employers should:

• Be aware that under the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022, any tips or service charges received electronically must be distributed fairly among employees and cannot be retained by the employer except in narrowly defined circumstances. If such payments are collected but not distributed, employers may face claims under the Payment of Wages Act 1991 for unlawful deductions, as highlighted in this case. Employers should ensure robust systems are in place to account for, track, and distribute electronic tips transparently and in line with statutory requirements.
  
  
• Equally important is the treatment of cash tips, which also fall within the scope of the 1991 Act where employers exercise control over their distribution. If staff pool or declare cash tips for redistribution, employers have a responsibility to ensure fair and timely payment. A failure to distribute such tips, particularly when acknowledged in employment documentation, can be deemed an unlawful deduction from wages. Employers must ensure that final wages issued upon termination include any outstanding tip entitlements.
  
  
• Be proactive in communicating with employees regarding how tips are managed and distributed. Clear, written policies that align with legislative requirements should be provided and implemented in practice. Transparency can reduce disputes and demonstrate compliance if a claim arises.

Be mindful of statutory complaint timeframes. While the law allows a limited extension where “reasonable cause” for delay is shown, ignorance of timelines is unlikely to be accepted. Ensuring employees have access to grievance procedures internally may prevent external claims and mitigate reputational and financial risk.

The full case can be found here: 
https://www.workplacerelations.ie/en/cases/2025/april/adj-00055557.html