New laws on gratuities mean that businesses in hospitality – restaurants, hotels, taxis, hairdressers, delivery services, among others – must distribute all tips, gratuities, and service charges received by electronic means fairly to staff, including contractors, working in the business.

Businesses must clearly display their policy on how tips, gratuities and service charges are distributed and must have a written policy for staff to understand how they are shared. When gratuities are distributed, the employer must provide a statement to workers showing the amount received and the share to each employee or contract worker in that period.

Employers are obliged to decide on the policy they choose regarding distributing tips or gratuities and it must be included in the employee’s core terms within five days of starting work with the business.

The policy must take into account the experience of the employee; the revenue generated by the them; the hours worked; whether the employee is full or part-time; the role of the employee; and the method of distribution of tips to employees.

If an employee is not satisfied with the policy or their compensation, they can lodge a complaint with the Workplace Relations Commission (WRC) which can include unlawful deductions, failure to distribute tips in a fair manner; unlawful retention by the employer of tips.

For more detail on the new rulings on Tips and Gratuities, visit the WRC website at

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