Employers warned to give tips to hospitality staff

| 24/07/2012

320px-2_usd_gratuity.jpg(CNS): Following a number of complaints filed with the Department of Labour and Pensions government officials are reminding employers to follow the law and ensure that service staff are being given their gratuities. An important part of many workers’ earnings, the government department said hospitality employers should be submitting their systems and plans for distributing tips to employees to the department to ensure they are compliant. Those employers who are not following the law can expect to face heavy fines, it warned, if they are convicted of any labour law offence. The director of the department said his office hopes to ensure that everyone is aware of the law so there are no excuses for rogue employers.

“The Department realizes that some businesses may be new, or have new managers or employees who have not been given proper training or awareness on the Labour Law, or due to business pressure may tend to overlook some legal obligations,” Mario Ebanks said.

Having received a number of confidential complaints he said they were being investigated but the goal was to ensure full compliance with all employers and ensure employees also know their rights.

“At times these infractions are only uncovered when and employee is terminated or resigns, and then they make a complaint with the Department, including details of a host of infractions, including improper recording and distribution of gratuities,’ Ebanks revealed. “The Department is ensuring that businesses are fully aware of the Labour Law, so that as enforcement of the Law becomes more robust it will not be possible for anyone to claim ignorance. The proper recording and distribution is important, since gratuities often form a significant portion of a service-workers income.”

According to the law any wages or gratuity payments earned by an employee must be given to the employee within one week of the making of payment. The employer also has an obligation to give employees precise statements in writing showing how payments were made. Employers who collect gratuities must also display a notice for customers stating the rate of gratuity.

Any service employer who fails to display a notice in a place where it may be easily seen by a customer is guilty of an offence and liable on conviction to a fine of $10,000.
Employers who have discontinued their gratuity service, or If they have switched from one distribution plan to another, the modifications must be approved by the Director of Labour of the impending changes.

Penalties also apply to the other sections presented here. Employers who require assistance or guidance in these matters should contact the Department of Labour and Pensions which is now located on the 2nd floor of Mid Town Plaza on Elgin Avenue and is open to the public from 9:00 a.m. to 4:00 p.m. Monday-Friday; telephone: 945-8960, fax: 945-8961, confidential hotline for labour and pensions complaints: 945-3073.

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  1. Legal Seagull says:

    Now there is a decent group litigation action in this one – 20% of all the income from these deadbeat restaurants for the last 6 years would add up to a decent sum.

  2. SCROOGE says:

    The problem of restaurant owners using their gratuity account to subsidize wages goes back decades in Cayman. Like many places in the World people here are very reluctant to refuse to pay the “included” 15% if the quality of the service, or food was not up to scratch. My own personal gripe is that should you indulge yourself with a relatively expensive bottle of wine with your meal, you are paying 15% on perhaps $50/60 when the “service” provided is no more than that required to give you a $10 bottle of Perth Pink, or Chateau Wogga Wogga.

  3. Anonymous says:

    Some of these busines give free comps to people that are in government or who knows who thing… or the business is owned by a company or person who has more money than the Government and so has influence or so many managers and supervisors that they just point fingers at one another and oon it just gets sweeped under the rug due to laziness in investigating the matter. DO NOT SUPPORT BARS AND RESTAURANTS THAT HAVE 15% included in check. THATS WHAT SERVICE IS ALL ABOUT! EARNING THAT 15% OR MORE.

  4. Anonymous says:

    This is just another symptom of the evils of the indentured slavery law.


    Employers are free to abuse their expat employees because the employer holds the work permit and can pull it at any time.


    Complainers are sent home within a few days of a complaint without their last month's pay. Problem solved.


    It is all about control.

  5. Anonymous (not verified) says:

    How about we just withhold work permits from non compliant businesses. They do not deserve the privilege.

    • Anonymous says:

      Yea right!  Asking Caymanian immigration to do their job is like asking the Caymanian finance minister to do his job.  Even if they wanted to they haven't a clue as to how to go about it.  As long as hireing is based on Caymanianisms  no one can expect any work to get done well, on time and never on budget.  But hea!  All the nonperforming, non employable Caymanians are getting fed regularly.  THAT is the reason for CIG right?  Running the country is not even a close second.  Perhaps if they gave the job to the UK with the bonus of free food for the bushits for life Cayman would not be such a third world wanna be.

  6. Anonymous says:

    Name & shame the businesses please.

    We should ask if the tips go to the staff when we pay bills. If they don't, don't pay the gratuity.

  7. Anonymous says:

    I am Caymanian and left thetourism business because my employer did not pass down the tips and I could never verify that health insurance had been obtained for me.


    These organisations should be named and shamed , the implementation of the existing law is pathetic

  8. Anonymous says:

    Tips are a rip-off and should be stopped. Do you tip the assistant in a shoe shop or a supermarket? Do you tip your accountant or your garbage-collector? Do you tip firefighters? Of course you don’t. So what’s so magical about the person who plates and delivers your food or squeezes the top off a Heineken bottle?

    The fact that tips have “always been around” in the industry is irrelevant, if not another strong argument for abolishing them. If you went to a supermarket and then found 15% added on to the end of your grocery bill (“for the packing and shelving staff”), you’d refuse to pay it, and rightly so. What’s so different about restaurants and bars? And the bit I love is where they leave a line for an ADDITIONAL tip, probably hoping you hadn’t noticed the 15% already on it.

    Restaurant- and bar-owners should pay their staff a proper salary instead of expecting their customers to do so. If they can’t, they should close. Every other business works by those rules. There’s no reason why the so-called “hospitality” industry (ha ha) can’t do so too.

    • Anonymous says:

      Clearly you are not a restaurant or bar owner in the Cayman Islands because if you were you would not speak such foolishness as to wish for us to abolish the 15% gratuity and pay bartenders and servers a higher wage to replace the grat. It simply costs too much as it is to do business here. Furthermore if I had to pay my staff the rate you suggest I would be left with no choice but to either cut everyone’s salaries across the board including caymanians or close up shop tomorrow and fire all of my Caymanian staff too because I would not be able to afford to pay the wages needed to attract skilled and dependable bar staff and servers. Although I firmly believe staff must provide excellent service to earn a tip you have to remember dining out or going out for a drink is not a right but a luxury. In order for us to provide you with this luxury you need to pay or stay home which is fine because someone else will appreciate the service and want the luxury of being served in your place and will pay the gratuity without dispute.

    • Anonymous says:

      Actually, most people tip the kid at the grocery store if he carries the bags to the car and while they don't tip shoe store clerks they do tip shoeshine men (I guess they don't have those in Cayman due to lack of shoes) and they tip car valets and barbers and hair dressers and bellmen and give the postman and the garbagemen something at Christmas etc. If you are not doing these things, it mean you are cheap not smart.

  9. Anonymous says:

    name the crooks!!!!!!

  10. Anonymous says:

    Simple solution to this.

    Long ago I stopped eating and drinking in any places that added an automatic 'gratutity' to the tab because I assumed it was being kept by the owners.

    If I can't tip the server or bar staff in cash and see it go into their pocket or a bucket/tips jar you don't get my business. If I can see the staff divvy up the tips at the end of their shift you will definitely get my business.

  11. Anonymous says:

    Why dont you list the names and show who these crooks are. Any restaurant or bar charging 15% gratuity on the bill must show the breakdown of tips to staff in a report in BOH on bulletin board to show the breakdown and grats distributed. Another crooked way with these restaurants and bars is taking the bank fee for accpeting credit or debit cards that banks charge.They then deduct this fee from employees pay cheque.

    Another scam is deducting medical and leading the employee to beleive they are being covered and then told that the insurance company called the HR or wrote a letterstating this but was never passed on or received in the mail. End up being under the impression that paying a higher premium and being covered. That would be considered as insurance fraud.


    Ah…Cayman one day you will wake up to see 12 foot high walls with broken glass bottles and bars on your windows and all the expats will have left and you will scratch your head and realize that it was not just all a dream.

  12. Anonymous says:

    As usual too late in enforcing this. I had to quite my employment with a restaurant in XXXX becuase of this and also all the other Caymanians. It was a good excuse once agian to show that Caymanians dont want to work in the tourism industry and as always the Phillipinos stayed on and just shut up. I guess we will never see those persons in court XXXX