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Recent changes to Ontario’s Employment Standards Act (ESA) mean that there are now rules about the handling of tips and gratuities in the workplace.
\nThis month’s On the Radar looks at these new rules, including when workers get to keep tips and what they can do to protect their rights.<\/p>\n
In workplaces where people leave tips, like hair and nail salons, restaurants, bars, and taxis, employers must now let workers keep the tips that people give them. An employer who decides that tips go into a pool for sharing does\u00a0not<\/strong>\u00a0usually get a share for themselves. For example, a restaurant owner who spends a lot of time serving food can share in the tips.<\/p>\n The ESA does\u00a0not<\/strong>\u00a0count tips as wages. So, employers still have to pay minimum wage to workers who get tips. Workers should keep track of the tips they get, whether they keep their own tips or get a share of tips from a “pool”. If an employer does not follow the rules about tips, a worker might be able to get the money they’re owed by\u00a0making a claim<\/a>\u00a0with the Ministry of Labour. Workers who have questions or need help to deal with a problem with their employer, can read more in CLEO’s\u00a0Where can I get help and advice about my rights as a worker?<\/a><\/p>\n This email alert gives general legal information. It is not a substitute for getting legal advice about a particular situation.
\nThat’s the general rule in the ESA.
\nBut there are\u00a02 exceptions<\/strong>\u00a0to this general rule:<\/p>\n\n
When employers can share in the tips<\/h2>\n
\nBut the rules now say that an employer who owns all or part of the business\u00a0can<\/strong>\u00a0share in the tips if they regularly do a lot of the same work as:<\/p>\n\n
Tips aren’t wages<\/h2>\n
\nBut there’s more than one minimum wage. For example, there’s a general minimum wage, a minimum wage for students, and a minimum wage for people who serve liquor.
\nThe Ministry of Labour has information about the different\u00a0minimum wage rates<\/a>.<\/p>\nReporting tips as income<\/h2>\n
\nTips are income from employment so workers should include the amount in their income tax returns.
\nAn employer who puts tips in a pool and decides what share of the tips to give a worker has to include the amount on the worker’s T4 statement. The worker uses the information from the T4 statement on their income tax return.
\nOtherwise, workers are supposed to report tips themselves when they do their income tax.<\/p>\nMaking a claim against an employer<\/h2>\n
\nWorkers have\u00a0up to 2 years<\/strong>\u00a0to make a claim from the date the employer owes the money.
\nMost people don’t make claims against an employer that they’re still working for. This is because the\u00a0laws to protect workers<\/a>\u00a0don’t stop employers from firing their workers.
\nAnd if a worker is fired, it’s up to them to take action against the employer to get the money the employer owes them.
\nThe ESA says that employers can’t punish workers for asking about their rights or acting on their rights. If this happens, there may be\u00a0steps the worker can take<\/a>.<\/p>\nGetting legal help<\/h2>\n
\n*This article is reproduced with permission of CLEO (Community Legal Education Ontario).<\/p>\n