Confronting Tip Theft: An Interview with MPP Michael Prue

NDP MPP Michael Prue has been relentlessly trying to enact legislation that cracks down on the problem of tip theft in the hospitality industry in Ontario. Given that a large number of young workers are employed in restaurants, bars, and coffee shops I thought that this issue deserved some coverage. In that vein this blog post is going to examine the issue of tip theft and then interview Mr. Prue about his motivations in championing this issue.

Is Tip Theft a Problem in Ontario's Labour Market?

I have a lot of friends who work in the hospitality industry. Over the years I have heard frequent complaints about employers stealing tips. I have also spoken with friends who own or manage establishments who acknowledge that tip theft is an incredibly common practice across the hospitality industry. My take on the issue is that tip theft is a widespread, day-to-day practice that employers use to increase profitability at the expense of their employees.

Tip theft can occur in various forms, but some common examples are "tipping out" practices where employers require employees to give them a certain percentage of their tips or straight up tip theft where employers require employees to remit all their tips and keeps them for their own use. Employees face an uphill battle if they want to fight to get their tips as most employees in the hospitality industry are precariously employed, the industry has a low unionization density, and employers can fire people who complain with near immunity or repercussions. 

Employees working in the hospitality industry face any number of structural and systemic barriers to having adequate protections in the workplace. Oftentimes employees are members of historically marginalized groups and face oppression by virtue of their gender, being racialized, having recently immigrated, or being a young worker. Beyond this, getting traction around addressing tip theft is difficult due to lobbying efforts from anti-worker/pro-inequality groups like the Canadian Restaurant and Foodservices Association which advocates on behalf of large corporations which profit off illegal exploiting workers.

Tip theft is part of the wider problem of wage theft in Ontario's labour market. Wage theft is a problem that impacts a large swath of workers in variety of sectors and with remarkable variations. Some common examples of wforage theft are employers penalizing gas station attendants for gas-and-dash  thefts (often with deadly consequences), employers forcing employees to work overtime without proper compensation, or misclassifying employees as interns to avoid the obligations of workplace laws (i.e. paying minimum wage or making EI/CPP contributions). 

What's the History of the Tip Theft Legislation?

Mr. Prue initially brought forward his Private Member's Bill on tip theft in 2010 and then again in 2012. The revived legislation initially got a cold reception from the then Minister of Labour Linda Jeffrey who brushed aside the issue by stating "I think that they need to have that relationship clear at the very beginning of the employment history. We want employers to treat their employees fairly, and if they are not treated fairly they should speak to the Ministry of Labour." That may have remained the Government's position, but then then Premier Dalton McGuinty intervened. He stated that he was concerned about tip theft and ordering Ministry of Labour to closely examine Private Member's Bill.

The old incarnation of the Bill died when Mr. McGuinty resigned and prorogued the legislature this past fall. Mr. Prue has again introduced his Private Member's Bill in the legislature and it appears that either it will pass or the Liberals will introduce their own piece of legislation addressing the issue of tip theft. The current incarnation of the legislation - Bill 49, Protecting Employees' Tips Act, 2013 - is quite short and amends Part V.1 of the Employment Standards Act, 2000 by adding the following provision: "14.1 An employer shall not take any portion of an employee's tips or other gratuities." A simple fix for a widespread problem impacting countless employees on a daily basis.

An Interview with MPP Michael Prue

I asked a number of questions to Michael Prue about his Private Member's Bill and his motivations for bringing forward the legislation. He was kind enough take the time to respond to my questions and his answers appear below. After the interview there's a video where Mr. Prue discusses an older incarnation of  tip theft legislation.

MPP Michael Prue

Q: Can you tell my readers about the reasoning behind Bill 49, Protecting Employees' Tips Act, 2013 and what motivated you to take up this issue?

A: All my best policies come from constituents.  In this case a server from an upper scale restaurant in the Beach came to me with her complaint.  It seemed impossible  that her employer could take her tips with impunity.  I found out from the Labour Ministry that there was no protection for tips only for wages, hence my subsequent actions.

Q: Why is tip theft a major problem in the hospitality industry?

A: Tips are intended to compensate people for giving good service not for padding the profits of employers.  Servers make $8.90 per hour on the supposition that they will get tips.  If they are not getting them then they are making $54 a week under minimum wage for all other employees (based on 40 hour week).

Q: What do you make of the criticisms being levelled at Bill 49 by the Canadian Restaurant and Foodservices Association (i.e. the legislation unfairly impacts owner-operators and managers or that tip theft isn't a major problem)? 

A: It is a problem they choose to ignore.  Some of their members champion their right to take their employers money.  It is illegal in other provinces and some U.S. states.

Q: Tip theft is part of the wider problem of wage theft in the labour market. Despite a large body of research showing that wage theft is growing problem the Ministry of Labour isn't doing much to crack down on employers who are breaking the rules. Why do we have sustained governmental inaction on this issue?

A: They're powerful lobby groups.  Servers, hairdressers, cab drivers, and chambermaids are mostly unorganized and afraid of losing their meagre incomes.  The Ministry of Labour is powerless because tips are not included in the law.

Q. Young workers comprise a large segment of the workers employed in restaurants in Ontario. Do you think the Ministry of Labour could be doing more to protect the rights of young, precariously employed workers? If so, what could the Ministry of Labour be doing that they aren't doing now?

A: The majority of servers are part time, young or recent immigrant workers.  Because of their youth, inexperience, or lack of sufficient time in Canada they are susceptible to abuse.  The Ministry needs to advertize and inform workers in a broad range of media to stamp out egregious practices like: tip-outs to management; dine and dash abuses; breakage. uniform purchases; credit card charges; and, a myriad of other things that tip-outs can be assigned to make employers pay for restaurateurs expenses.