Ontario employers no longer able to demand employees share tips

The new bill doesn’t just apply to staff in restaurants, but also to other service industry employees that get tipped.
The new bill doesn’t just apply to staff in restaurants, but also to other service industry employees that get tipped. Photo: iStock.

A new Ontario bill is effectively putting an end to the practice of having employers share in the tips of service industry employees.

Bill 12, the Protecting Employees’ Tips Act 2015, has just been passed. It amends the Employment Standards Act of Ontario to include the ban on employers trying to get a cut of their employees’ wages.

This new bill makes it illegal for employers to hold back the tips their employees made to pay for business expenses, including credit card transaction fees and “dine and dash” customers. The only exception to that rule would be if the tips were in a pool that would see them distributed amongst other employees as well.

The new bill doesn’t just apply to staff in restaurants, but also to other service industry employees that get tipped.

The question is why it took Ontario so long to put a ban on employers clawing back tips in the service industry.

Ontario had tried for five years to put this law into effect. Initially, a version of the new bill was introduced in the Ontario legislature in 2010, but died in 2014 after having gone through three readings.

The issue for the Ontario legislature seemed to be tips where the employee is unionized, because some collective agreements have tip-sharing provisions.

Funny then that other provinces don’t seem to have had this much trouble passing a bill that protected employees’ tips.

For example, the British Columbia Employment Standards Act has prohibited employers to “deduct from a tip pool or from tips to which the employer has access, such as those made through debit or credit cards.”

Next to British Columbia, New Brunswick, Quebec, Prince Edward Island and Newfoundland have already implemented legislation, forbidding employers to deduct from their employees tips.

James Rilett, the Ontario vice-president for Restaurants Canada, told The Globe and Mail that it is only a small number of employers take a portion of their employees tips, because most owners are otherwise not able to hang on to staff. However, how many employees in the not-so-well paid service industry really formally complain about employer tip-deduction?

We’re in a tough economy and people are afraid of losing their jobs if they don’t comply with employer’s demands, especially in vulnerable sectors.

People employed in the service industry across are some of the most vulnerable employees, because their work is often not permanent and many make little more than minimum wage. In other words, tips are very important to them – many rely on tips to help them supplement an otherwise meagre income.

That is precisely why we need provincial/territorial laws in place to prevent employees being disadvantaged in such a way.

Isn’t it about time every province and territory jumped on the bandwagon to make sure those in the service industry get to keep their tips?

Find a Lawyer