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Ontario Protects Tips and Gratuities

New Regulations from MPP Potts’ Tipping Bill come into effect on June 10, 2016

Starting June 10, 2016, Ontario is making it illegal for employers to take employees' tips and other gratuities, except in limited circumstances. Employers will also not be able to make deductions from tips for things like spillage, breakage, losses or damage. These rules affect employers and employees covered by the Employment Standards Act, 2000 in workplaces where tips and other gratuities are received - such as at bars, restaurants, hair and nail salons, catering firms and taxis.

 

The rules coming into effect were the result of a Private Member’s Bill introduced by MPP Arthur Potts (Beaches-East York) and extensive consultation with stakeholders, including workers’ groups and the restaurant and service industry.

Employers are allowed to withhold or make deductions from their employees' tips and other gratuities if they are:

 

  • Collecting and redistributing the money among some or all its employees, a practice often referred to as tip pooling
  • If a statute or a court order authorizes it

 

Business owners who regularly spend most of their time doing the same work as those who would normally receive tips - such as cleaning and serving food - will still be allowed to take part in a tip pool.

 

Strengthening protections for workers is part of the government's economic plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan includes investing in talent and skills, including helping more people get and create the jobs of the future by expanding access to high-quality college and university education. The plan is making the largest investment in public infrastructure in Ontario's history and investing in a low-carbon economy driven by innovative, high-growth, export-oriented businesses. The plan is also helping working Ontarians achieve a more secure retirement.

 

QUOTES

 

“Hard-working people in the hospitality and service industries who receive tips and other gratuities for a job well-done deserve to be treated fairly. These new rules will help better protect vulnerable workers, while creating a level playing field for the vast majority of businesses that follow the rules.”

–– Kevin Flynn, Minister of Labour

 

“I’m delighted that my first Private Member's Bill, a bill that regulates who can share in workplace gratuities, is finally coming into effect. When customers leave a tip they reasonably expect it to go to those who participated in their service experience, and not to the owners’ profit line. This change to the Employment Standards Act supports vulnerable workers and sets a fair standard for owners to follow when pooling employees' tips.”

–– Arthur Potts MPP, Beaches-East York, author of tipping legislation

 

QUICK FACTS

 

  • The 2014 Statistics Canada Labour Force Survey found there were 65,300 food and beverage service employees in Ontario who receive tips and gratuities.

 

 

Additional Resources

 

 

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