On June 10, 2016, Ontario's Bill 12 ("Protecting
Employees' Tips Act, 2015") will come into force (the
The Act amends the Employment Standards Act
2000 (the "ESA") to protect tips and gratuities
that "a reasonable person would be likely to infer" are
intended either for direct receipt by the employee or for
redistribution to employees.
The Act prohibits employers from:
withholding tips or gratuities from
making deductions from an
employee's tips or gratuities; or
causing an employee to return or give
up tips or gratuities.
Employers may withold or deduct from tips or gratuities where
authorized by statute or court order, or where the deduction or
withholding are intended for redistribuition to employees.
Amounts withheld contrary to these restrictions will be
considered to be (and are enforceable as) "wages owing"
by the employer under the ESA.
Employers, directors and shareholders are also prohibited from
"sharing" in tips or gratuities under the Act.
This prohibition does not apply, however, to directors,
shareholders, sole proprietors or partners who "regularly
perform to a substantial degree the same work" performed by
employees who share in the redistribution of tips or
In the case of unionized employers, existing collective
agreement provisions dealing with the treatment of tips or
gratuities, to the extent that such provisions conflict with the
Act, will be permitted to prevail until such time as the
collective agreement expires and is renegotiated.
Employers operating businesses where tips or gratuities form
part of employee compensation should be carefully reviewing their
policies on the treatment of these earnings to ensure compliance
with this new legislation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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