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NDP MPP Michael Prue talks to Nadine about tipping

October 15, 2012

Nadine Blum interviews MPP Michael Prue about legislation to protect employees’ tips

On June 11, 2012, Ontario MPP for the Beaches-East York, Michael Prue, introduced private member’s Bill 107, Protecting Employees’ Tips Act, 2012, which aimed to amend the Employment Standards Act, 2000 (“ESA”) to prevent employers from taking “any portion of an employee’s tips or other gratuities.”

The ESA provides that an employer “shall pay all wages earned during each pay period.”  Unless otherwise provided for in the ESA, an employer cannot “make a deduction from an employee’s wages or cause the employee to return his or her wages.”  However, the ESA specifically excludes “tips and other gratuities” from the definition of “wages”. As a result, employers are not prevented from seizing an employee’s tips.

Moreover, a regulation under the ESA (O. Reg 285/01) specifically sets the minimum wage for employees who serve liquor as a regular part of their employment at $8.90 an hour, as opposed to the $10.25 minimum which applies to most other employees. So employees who are earning less money than others, presumably on the basis that they are earning tips, can have those tips seized by their employer.

Other provinces, including New Brunswick, Newfoundland and Labrador, Prince Edward Island and Quebec, have passed legislation prohibiting employers from seizing an employee’s tips and gratuities.

Mr. Prue had introduced the same amendment in 2010 – in Bill 144, Protecting Employees’ Tips Act, 2010.  However, that bill died on the order paper before it could be called in Committee.

Bill 107 was expected to receive second reading at the end of this month.  However, on October 15th, Premier Dalton McGuinty resigned as premier and prorogued (suspended) the legislature. Bills that have not passed through the legislative process and received royal assent prior to a prorogation are terminated.

Consequently, like a number of other important legislative initiatives, Bill 107 was killed as a result of the premier’s action. In order to revive a bill that has been terminated as a result of prorogation, it must be reintroduced at a future session of the legislature and the process must start again from the beginning.

Prior to the proroguing of the legislature, Nadine Blum spoke to Mr. Prue by phone from Bancroft, Ontario.  The following is an excerpt from their discussion about Bill 107.

What was the impetus for this proposed amendment to the ESA?

All my best ideas come from my constituents, this one included. A couple of years ago, a woman came into my office who worked as a server in an upscale restaurant in the Beaches area.  She told me that management forced her to give up a percentage of her tips in order to keep her job. At first I thought that this must be illegal.  But when we did the research, we found that there are no laws preventing “tipping out” in Ontario.

What is “tipping out”?

Most commonly, it is when employees are forced to remit 4-5% of the value of the food and drink they sell each night.  This is regardless of whether the workers actually get any tips.  Some of the worst offenders are banquet halls.  They automatically add 15-18% on top of huge bills and, in the last 2 years, I have not found a single banquet hall that gives any of that tip to its servers.  It all goes to the management of that banquet facility.  It is pure gravy for them.

The restaurant industry says that this is part of their profit and that without skimming from employees, some restaurants will go out of business.  I wouldn’t deny that for a minute.  But if a restaurant’s profits come from taking money from those it was intended for, maybe they shouldn’t be in business.

Labour Minister Linda Jeffrey has said she planned to meet with you to discuss the Bill – has this happened?  What was the result?

We’ve met with the Minister and her staff.  They say that they’ve received only 15-20 complaints about this issue in the last year.  But we’ve told them about the hundreds of complaints we’ve gathered.  We’ve tried to detail the complaints without giving people’s names.  People have been fired over speaking out about this practice, and blackballed in the industry.

The Ontario Restaurant Hotel and Motel Association has stated that tipping out is necessary to spread tips across non-tipped support staff, like dishwashers and bussers, and that the wording of the Bill would prevent this practice.  How do you respond?

That is totally false, and they know it.  It doesn’t say that tips cannot be shared with people who deserve to have them shared. It just says that the employer can’t take their portion.

The wording seem broad enough to cover workers outside of the restaurant industry. Can you comment?

The Bill is generic – it doesn’t just cover people who work in food services – it covers anyone who gets a tip – including hairdressers, valets and hotel workers, who have also reported being forced to turn over a portion of their tips to management.

We hope Mr. Prue will reintroduce Bill 107 when the legislature is again in session. We will keep you posted on any developments.


Nadine Blum

Practice Areas

Employment Law