It’s taken five years, four versions of the bill and two MPPs to bring it forward, but tips in Ontario will soon be protected from employer clawbacks.
Former New Democrat MPP Michael Prue first raised the issue of employers eating into servers’ tips in 2010.
For many restaurant servers, hairstylists, masseurs and others in the service industry, gratuities are a big part of their income. But in many cases, servers and others have seen those tips eroded by employers who take a cut, whether to cover the cost of broken dishes, pay for credit card transaction fees or to boost profits.
It’s a common problem that spans the province, Ottawa-based server Michael Vorobej told a committee at Queen’s Park on Monday: “No one knows about this that doesn’t work in the industry.”
Cash tips are often the easiest for employees to hang onto, but some restaurants require all tips be turned in an then divvied up. Vorobej said this can be a good thing — he knows that hosts and hostesses, kitchen workers or bus boys and girls deserve a cut too. The problem is when employers dip their hands into the pool.
Tips left on credit and debit cards are the most commonly eroded, and the bill will now require employers to turn those over in full — which has been a long standing issue in spas, in particular. There are caveats to the bill that allow restauranteurs and others to set formal tip-sharing policies that will allow for fair division of tips. Kitchen staff are often paid far less than front-of-house servers, who get tips — even though servers in Ontario make a lower minimum wage ($9.80 an hour compared to the $11.25 standard rate) gratuities often more than make up for that gap.
“It’s hard to balance between tipped and non-tipped employees, this will make it easier,” said Sean Baird with the Burlington Restaurant Association. He said owners welcome the “fairness and regulatory clarity” the bill offers.
The bill is part of a massive programming motion to pass a number of pieces of legislation before the house rises Dec. 10 for the year. And it’s been a long haul getting it to this point.
Liberal MPP Arthur Potts defeated the New Democrat who first brought forward the tips bill, but pledged to finish that work.
Former MPP Michael Prue, a New Democrat who represented the riding of Beaches-East York until the 2014 election, first introduced a one-line version of the bill in 2010. He introduced three times the same private member’s bill that simply read, “An employer shall not take any portion of an employee’s tips or other gratuities.”
As simple as that sounds, it presented problems. Unionized banquet halls, for example, include tip sharing provisions in their collective agreements. Single-owner-operators of small restaurants and cafés often rely on tips from their own work. And the bill could have made it nearly impossible for tip sharing or for taxes to be taken off of declared tips (the Canada Revenue Agency takes a cut of all gratuities that an employer pays out on a paystub).
Prue’s bill died on the order paper with the call of the 2014 election, and the Liberal who took over his riding, Arthur Potts, revived it. But this time, the concerns about unions, owner-operators and tip sharing were addressed in a slightly longer bill.
Now in committee, the bill could still be amended. The New Democrats are concerned the provision about collective agreements and tips could still allow employers to take a cut, something some servers worry about as well.
“I want to beg the legislature not to allow unions to give away tips to employers,” said Vorobej.
However, the bill is written in such a way that as collective agreements expire, they won’t be allowed to redistribute tips in this way.
The programming motion means the bill will see clause-by-clause consideration on Thursday and see a final hour of debate and vote on Monday. Many other jurisdictions, including Quebec, New Brunswick, Prince Edward Island and Newfoundland, already ban the practice.
By Ashley Csanady