Taxing of tips bonus carries a heavy price

Damien McCarthy: The worker is losing out

Staff shortages in hospitality are beginning to take their toll and many businesses will have to close a number of days every week because they won’t be able to cover over rosters, a leading HR expert has warned.

Damien McCarthy of Kerry-based consultancy firm HR Buddy, said they may have to consider shutting their doors or decreasing their operational hours during the peak summer season as they are struggling to find staff.

“Many part-time student workers are not available due to college and Leaving Cert exams. This shows how dependent the industry has become on young student workers,” Mr McCarthy said.

He said attracting part-time staff to the industry is proving more difficult than ever.

The wisest choice for employers might be to close on the two quietest trading days and give staff a break

“Many service industry workers choose part-time or casual work in hospitality roles because of the tip bonus but this has even been impacted negatively now as most tips are taxed because they are coming in electronically.

“The worker is losing out and this key attraction tool that existed when we were a more cash orientated society, in pre-pandemic times, is now gone,” the HR Buddy director stated.

He said the hospitality industry also lost some very valuable people because of workplace closures throughout the pandemic. Staff moved on to other industries and, to a certain extent, it is now that this is really coming back to bite the industry.

Mr McCarthy suggested that the wisest choice for employers might be to close on the two quietest trading days and give staff a break.

“Many businesses are having to ask staff to work extra shifts to cover the roster and realising that long-term they may be looking at burnt-out employees,” he remarked.

Mr McCarthy said there are health, safety and welfare issues to take into consideration and, as it currently stands, some hospitality employers cannot fully schedule a week’s roster without possibly breaking the law under the Organisation of Working Time Act.

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