Ontario: Bill 12 Will Protect Hospitality Industry Tips From Unscrupulous Employers

Update:

Ontario is expected to pass a law this month that would make it illegal for employers to withhold tips from restaurant workers. The legislation has been years in the making.
Ontario is expected to pass a law this month that would make it illegal for employers to withhold tips from restaurant workers. The legislation has been years in the making. MICHAEL SEARS / MCT FILE PHOTO

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The Ontario government is expected to pass new legislation Monday making it illegal for employers to withhold tips from workers.

There are probably better uses for a vacation day than driving 450 kilometres to testify at Queen’s Park on your own dime.

But Ottawa-based banquet server Michael Vorobej thinks the investment is worthwhile if it means holding tip-stealing bosses to account.

“It’s shocking what’s going on out there. There’s no shame,” he says. “I think that our industry needs to be brought out of the shadows.”

That is what’s slated to happen on Monday, when the government is expected to pass new legislation making it illegal for employers to withhold tips from workers.

Bill 12 or Protecting Employees’ Tips Act, as currently written, will go into effect in June 2016, if given royal assent in December 2015.

The bill will also allow the Ministry of Labour to collect stolen tips as if they were unpaid wages under the Employment Standards Act.

Vorobej, who testified at a recent social policy committee hearing, has worked in the server industry since 1989. He says tip theft is a growing problem that makes it difficult for low-wage tipped workers to survive.

“It’s happening all the time,” says Vorobej. “In many restaurants you have to hand over all your tips to your manager at the end of your shift and they will determine how much you get in tips.”

Several provinces, including Quebec, Prince Edward Island, New Brunswick and Newfoundland, already have similar legislation to protect tipped workers. In Ontario, though, the proposed law’s passage has so far been rocky: Bill 12, or the Protecting Employees’ Tips Act, has been put forward several times since 2011 but so far failed to become law.

Originally sponsored by former NDP MPP Michael Prue (Beaches-East York), the proposed Ontario bill has since been championed by Prue’s Liberal successor, Arthur Potts.

“To me it was a commitment to the community to carry on the legacy of that work,” Potts told the Star.

Bill 12, which began life as a one-line document banning employers from taking workers’ tips, initially faced stiff opposition from the restaurant industry.

The proposed legislation has since been amended to allow bosses to temporarily withhold tips if they redistribute them as part of an employee tip pool, a measure that gives some pay parity to front-of-house staff and lower-paid back-of-house workers. Managers will not be able to participate in the pool unless they are the sole owner of a company or double as servers.

The bill will also phase out collective agreement provisions that have previously allowed managers to get up to a 50 per cent share of tip pools.

In public committee hearings on Nov. 30, the head of the Ontario Restaurant Hotel and Motel Association, Tony Elenis, said he was satisfied with changes, and was “absolutely in support” of the bill.

“Integrity should be part of any business,” he told the legislature’s social policy committee.

Unfortunately, Vorobej says, integrity is not always the name of the game. He says the Ottawa-area banquet hall where he works, which charges an automatic 15 per cent gratuity distributed to workers, is hemorrhaging clients to “grey operators” who charge the same rate but don’t give employees a dime. In an industry that operates on razor-thin margins, Vorobej says cheating allows competitors to offer the same service for lower prices.

The proposed updates to the Employment Standards Act come as the Wynne government conducts a wholesale review of its employment and labour laws, which critics say no longer reflect the reality of Ontario’s increasingly precarious workplace.

Avvy Go, director of Metro Toronto Chinese & Southeast Asian Legal Clinic, said she welcomed the changes to help low-wage tipped workers but warned that the key to Bill 12’s success would be effective enforcement.

The Star has previously highlighted weak enforcement of employment standards, and the Ministry of Labour’s poor success rate on collecting stolen wages for workers.

“It will again be up to the workers to file their claims with the Ministry of Labour if their employer does not obey the law, which many workers will not be able to do until their employment comes to an end,” Go said.

“It is also difficult for employees to know how much tips they have earned during their shift.”

Enforcing the bill is key to protecting those who need it most, Vorobej added.

“There’s always going to be humble jobs in our economy. But they don’t have to be humiliating.”

Bill 12, Protecting Employees’ Tips Act, 2015

Bill 12                                                          2015

An Act to amend the Employment Standards Act, 2000 with respect to tips and other gratuities

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

  1. The Employment Standards Act, 2000 is amended by adding the following Part:

Part v.1
employee tips and other gratuities

Definition

   14.1  (1)  Subject to subsection (2), in this Part,

“tip or other gratuity” means,

(a)  a payment voluntarily made to or left for an employee by a customer of the employee’s employer in such circumstances that a reasonable person would be likely to infer that the customer intended or assumed that the payment would be kept by the employee or shared by the employee with other employees,

(b)  a payment voluntarily made to an employer by a customer in such circumstances that a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees,

(c)  a payment of a service charge or similar charge imposed by an employer on a customer in such circumstances that a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees, and

(d)  such other payments as may be prescribed.

Same

(2)  “Tip or other gratuity” does not include,

(a)  such payments as may be prescribed; and

(b)  such charges as may be prescribed relating to the method of payment used, or a prescribed portion of those charges.

Prohibition re tips or other gratuities

14.2  (1)  An employer shall not withhold tips or other gratuities from an employee, make a deduction from an employee’s tips or other gratuities or cause the employee to return or give his or her tips or other gratuities to the employer unless authorized to do so under this Part.

Enforcement

(2)  If an employer contravenes subsection (1), 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.

Statute or court order

14.3  (1)  An employer may withhold or make a deduction from an employee’s tips or other gratuities or cause the employee to return or give them to the employer if a statute of Ontario or Canada or a court order authorizes it.

Exception

(2)  Subsection (1) does not apply if the statute or order requires the employer to remit the withheld, deducted, returned or given tips or other gratuities to a third person and the employer fails to do so.

Pooling of tips or other gratuities

14.4  (1)  An employer may withhold or make a deduction from an employee’s tips or other gratuities or cause the employee to return or give them to the employer if the employer collects and redistributes tips or other gratuities among some or all of the employer’s employees.

Exception

(2)  An employer shall not redistribute tips or other gratuities under subsection (1) to such employees as may be prescribed.

Employer, etc. not to share in tips or other gratuities

(3)  Subject to subsections (4) and (5), an employer or a director or shareholder of an employer may not share in tips or other gratuities redistributed under subsection (1).

Exception — sole proprietor, partner

(4)  An employer who is a sole proprietor or a partner in a partnership may share in tips or other gratuities redistributed under subsection (1) if he or she regularly performs to a substantial degree the same work performed by,

(a)  some or all of the employees who share in the redistribution; or

(b)  employees of other employers in the same industry who commonly receive or share tips or other gratuities.

Exception — director, shareholder

(5)  A director or shareholder of an employer may share in tips or other gratuities redistributed under subsection (1) if he or she regularly performs to a substantial degree the same work performed by,

(a)  some or all of the employees who share in the redistribution; or

(b)  employees of other employers in the same industry who commonly receive or share tips or other gratuities.

Transition — collective agreements

14.5  (1)  If a collective agreement that is in effect on the day section 1 of the Protecting Employees’ Tips Act, 2015 comes into force contains a provision that addresses the treatment of employee tips or other gratuities and there is a conflict between the provision of the collective agreement and this Part, the provision of the collective agreement prevails.

Same — expiry of agreement

(2)  Following the expiry of a collective agreement described in subsection (1), if the provision that addresses the treatment of employee tips or other gratuities remains in effect, subsection (1) continues to apply to that provision, with necessary modifications, until a new or renewal agreement comes into effect.

Same — renewed or new agreement

(3)  Subsection (1) does not apply to a collective agreement that is made or renewed on or after the day section 1 of the Protecting Employees’ Tips Act, 2015 comes into force.

Commencement

  1. This Act comes into force on the day that is six months after the day it receives Royal Assent.

Short title

  1. The short title of this Act is the Protecting Employees’ Tips Act, 2015.

This reprint of the Bill is marked to indicate the changes that were made in Committee.

The changes are indicated by underlines for new text and a strikethrough for deleted text.

______________

EXPLANATORY NOTE

The Bill amends the Employment Standards Act, 2000.  The new Part V.1 prohibits employers from withholding tips or other gratuities from employees, from making deductions from an employee’s tips or other gratuities, or from causing the employee to return or give his or her tips or other gratuities to the employer except as authorized under the new Part.

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