Starting today, it is illegal for Ontario employers to take server’s tips

Employers no longer have a right to demand a share of the tips of serving staff.
Employers no longer have a right to demand a share of the tips of serving staff. (Photo: iStock)

To all Ontario employers: don’t dip into the tips!

As of today, employers no longer have a right to demand a share of the tips of serving staff in bars, restaurants, hair and nail salons, catering firms, and taxis.

Staff and owners who fall under the Employment Standards Act, 2000 are affected by the new tip ban, which includes employers not being allowed to deduct for things like breakage, spillage, losses or damage.

Under the ESA, a “tip or other gratuity” is defined as money that is “voluntarily made or left” by a client or customer for an employee. If the tip is not directly given to the server but the employer, then it must still be handed over to the employee in its entirety with a few exceptions.

While employers can’t take tips from their staff, there are two situations in which they are allowed to take deductions from tips:

  • If it is authorized by court order or legislation; and
  • If the employer has a practice such as tip pooling, which means tips are collected and redistributed among employees.

This new law comes to Ontarians courtesy of Bill 12, also known as Protecting Employees’ Tips Act, which was passed on December 10, 2015.

According to Ontario Minister of Labour Kevin Flynn, the new law was created to “help better protect vulnerable workers, while creating a level playing field for the vast majority of businesses that follow the rules.”

However, not everyone is happy with the new law. Ontario Restaurant Hotel and Motel Association president Tony Ellis sees it as “more red tape” for the hospitality industry.

Red tape or not, employers have to follow the new rules but what happens if employers still won’t hand over tips?

According to Bill 12, “If an employer contravenes subsection (1)[which forbids tip deductions], the amount withheld, deducted, returned or given is a debt owing to the employee and is enforceable under this Act as if it were wages owing to the employee.”

In other words, don’t dip the tip.

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