Summary#
This bill changes Alberta’s Employment Standards Code to protect tips and other gratuities for workers. It defines what counts as a tip, makes clear that tips belong to employees, and sets rules for tip pooling.
- Defines “tip or other gratuity” to include voluntary tips and service charges a customer would assume go to staff.
- States that tips are the employee’s property and cannot be treated as wages.
- Bans employers from keeping, deducting, or withholding tips, unless required by law or court order.
- Allows tip pooling among employees, with strict rules for written agreements.
- Lets an employer help administer a pool only if all affected employees agree.
- Allows cabinet to name other types of payments that count as tips by regulation.
What it means for you#
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Workers
- Your tips belong to you. The employer cannot keep any part, deduct fees, or count tips toward your wages.
- You can join a tip pool only under a written agreement that says what is pooled, when it applies, and how it is shared.
- If your employer breaks these rules, the unpaid tips are treated like unpaid earnings, which you can claim.
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Employers
- You cannot keep, deduct from, or treat tips as part of wages, except if a law or court order requires it.
- If staff choose to pool tips, the agreement must be written and shared with you. It must state what portion is pooled, the time period, and the sharing method.
- You can administer a tip pool only if every employee in the pool agrees. You may be included in the pool only if you do substantially the same tipped work as staff (for example, an owner who also serves tables).
- Service charges that customers reasonably think are for staff must go to employees.
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Customers
- Tips you leave, and service charges that seem meant for staff, must go to employees.
- The bill aims to make it clearer where your money goes when you tip or pay a service charge.
Expenses#
No publicly available information.
Proponents' View#
- Tips should go to the workers who earned them, not to the business or management.
- Clear rules reduce confusion about service charges and improve transparency for customers.
- Low-wage service workers rely on tips; protecting them supports household income.
- Written pooling agreements let teams share fairly while preventing abuse.
- Aligns Alberta with other provinces that already protect tips.
Opponents' View#
- Small businesses may face more paperwork to set up and manage compliant pooling agreements.
- Banning employer deductions from tips could leave businesses paying processing costs (like credit card fees) without a way to recover them.
- Disputes among employees over pooling terms or fairness could increase.
- The “reasonable assumption” test for service charges may cause confusion and complaints if customers and businesses see it differently.
- Limits flexibility for employers to design compensation systems that balance front-of-house and back-of-house pay.