The left-wing AKEL party has proposed legislation to regulate the distribution of tips in the service industry, ensuring gratuities reach workers through transparent processes.
The bill, introduced by AKEL MP George Koukoumas, would establish legal frameworks governing tip collection and distribution, with strict penalties for employers who violate the regulations.
The legislation would apply to businesses providing products or services where customers typically leave gratuities. Tips could be paid in cash, by credit card or through digital platforms.
Under the proposed law, employers would be required to distribute tips to workers within two working days from the end of the allocation period and provide written notification of tip distribution within three working days.
Any charge linked to service that is mandated on customer bills or that could reasonably be considered by customers as constituting a tip would be covered by the legislation, according to the bill.
The proposal explicitly states that tips cannot substitute wages in any way or form part of salary calculations. Tips would also be exempt from employer or employee contributions and deducted from workers’ taxable income.
Employers would be required to develop tip distribution policies and maintain records of all gratuities received.
The bill prohibits withholding or delaying tip distribution, even with employee consent. It also bans employment contracts with unfavourable terms regarding tips, discrimination in tip allocation, and providing tips in the form of products or services.
Inspectors would be appointed to ensure compliance with the law. Employers who obstruct inspectors face up to six months imprisonment or fines up to €10,000, while those violating other provisions could receive six-month prison sentences or fines up to €15,000.
