Good morning, Mr. Speaker.
I rise today to provide to the Members of this Honourable House clarification that paid leave entitlement for persons who receive gratuities and service charges as a part of the minimum hourly wage rate is to be set at $16.40.
Mr. Speaker, in addition, the Ministry wishes to advise this Honorable House that the Ministry intends to amend the Employment Act 2000 (the “Act”) to clarify in law that other gratuities, which do not constitute part of the minimum hourly wage, will be excluded from the calculation of leave entitlement, which is the current intention of the law.
Mr. Speaker, prior to 1 March 2024, there was no definition for gratuity or service charge under the Act and both were considered as falling within the term ‘tip’ as defined in the Act and as such, did not constitute wages.
For the purposes of calculating the paid leave for employees who received gratuities and service charges pursuant to the Employment (Minimum Hourly Wage) Order 2023 prior to 1 March 2024, the interpretation of “a week’s wages” pursuant to the Act did not apply and these employees should have been remunerated at a minimum rate of $16.40 for all statutory leave entitlements.
Mr. Speaker, pursuant to the Employment (Protection of Employee Tips and Other Gratuities) Amendment Act 2023, which took effect 1 March 2024, the term ‘other gratuities’ was introduced and effectively differentiated tips from other gratuities. As a result, the calculation of a week’s wages for employees who receive gratuities and services charges has fundamentally changed, i.e. the leave entitlement for employees who receive other gratuities and whose wages vary from week to week, should be calculated by taking the average wages earned over the previous twelve weeks worked.
Mr. Speaker, recognizing the challenges that industries which accept other gratuities on behalf of their employees would and are currently facing, the Minister convened a special meeting of the Labour Advisory Council (“LAC”) to discuss these concerns and reach a consensus on the most reasonable and just way forward.
Mr. Speaker, as this most Honorable House may already be aware, the LAC comprises of representative of the government, employer groups and worker groups as equal and independent partners, together seeking solutions to the issues facing Bermuda’s labour force through social dialog.
Mr. Speaker, the LAC had a robust discussion on the paid leave entitlement for persons who receive other gratuities as a part of their minimum hourly wage entitlement. The consensus reached by the LAC is as follows:
- the paid leave entitlement for persons who receive other gratuities as part of their wages should be set at the minimum hourly wage rate, which is currently $16.40.
Mr. Speaker, the Ministry thanks the members of the LAC for their continued work and engagement on behalf of their respective memberships and we would like to take this opportunity to thank the Members of this Honourable House for the opportunity to address them in this regard.
Thank you, Mr. Speaker.