Be aware of Ontario’s tip pooling rules and regulations

Published February 15, 2018

With more than 64 labour reforms included in Bill 148, Restaurants Canada is taking this opportunity to remind our members and all foodservice owners and operators about the rules and regulations for Ontario’s employee tip pooling practices.

While tip pooling practices are legal in Ontario, there are numerous intricacies involved that all foodservice professionals should be aware of to ensure that they are in compliance with the Employment Standards Act.

The Ministry of Labour’s website explains what constitutes a tip pool: “A tip pool is a collection of employees’ tips that is redistributed among some or all of the employer’s employees. This includes tip outs, which are payments from one employee to other employees because it is required by their employer’s policy. An employer may withhold, make a deduction or require an employee to give them a portion of their tips and other gratuities if the amount that is collected will be redistributed as part of a tip pool.” However, employers are prohibited from sharing in the tip pool.

Several other very important questions that foodservice professionals may have in regard to tip pooling practices can be found on the ministry’s website.

Don’t forget, there are federal rules and laws in regard to these practices as well. CRA differentiates between direct and controlled tips.  Tips that are controlled by employers are subject to source deductions such as CPP and EI.  See Restaurants Canada summary of CRA tipping rules here (login required).

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