Halifax advocacy group urges Nova Scotia to ban 'tip theft'

Nova Scotia is the only province in Atlantic Canada without legislation that protects workers against so-called "tip theft," and a Halifax advocacy group for low-wage earners has started a campaign to change this.

Tip theft is when employers take gratuities left by customers for service industry workers, and use them to increase profits, cover overhead costs or simply pocket them, according to Lisa Cameron, executive director of the Halifax Workers' Action Centre.

Most workers in the service industry, such as servers, bartenders and cooks, make minimum wage. Cameron said they rely heavily on tips to make a more decent income.

Along with an awareness campaign, the Halifax group launched a survey that asks the public about tip theft and their tipping habits in general.

"I think it's sort of a no brainer, and it's a matter of just simple right and wrong," said Cameron. "The majority of folks who we've been surveying were not aware that tips were not the protected property of employees before seeing the campaign."

She said most respondents reported they always, or almost always tip when prompted, under the assumption the money goes directly to the employee, not the employer. 

"The thought of that money ending up in the boss's pocket is offensive both to the workers and to the customer," said Cameron. 

Even the Restaurant Association of Nova Scotia, an industry group, condemns the practice. Executive director Natasha Chestnut said in an email to CBC News the organization recently held a webinar on employers' rights related to tips.

Looking to P.E.I.

Most provinces in Canada have strict legislation against tip-theft. Prince Edward Island, for example, prohibits it altogether. 

Section 17.1 of its Employment Standards Act says, "Tips and gratuities are the property of the employee to whom or for whom they are given." Section 17.2 states employers are not permitted to withhold tips intended for an employee, or use them as partial wages. 

Cameron believes this is the type of standard that Nova Scotia should adopt, and describes P.E.I.'s laws as an "example of excellent legislation." 

Courtney Morrison, who previously worked in the service industry for 10 years, has experienced tip theft. As a banquet server for a major hospitality group in Halifax, she said clients would pay a flat rate for the event, and then an additional 18 per cent would be added as gratuity.

But according to Morrison, she never saw a dime of that 18 per cent. She was told the gratuities would go toward things like staff parties, something that was no help to her when she was trying to earn money to pay student tuition.

"So it's not really useful to me that you occasionally have a party for staff at a facility that you operate."

A 'manipulative business model'

As a bartender at a restaurant owned by the same company, Morrison said staff were expected to contribute money from their tip pool toward the business's debit and credit transaction fees.

This is an example, according to Cameron, of employers taking tips to cover overhead costs. 

"I just think it's a really manipulative business model," said Morrison. 

Often, she said, young people working at these types of places don't know their rights as employees. 

"Sometimes it takes a while to realize that you're getting ripped off by your boss," she said. 

With hopes of helping others going through similar situations, Morrison co-founded her own advocacy organization, Nova Scotia Hospitality Workers United. The group seeks to increase transparency and build community within the hospitality industry.

A spokesperson from Nova Scotia's Department of Labour told CBC that while it is aware of the concerns surrounding tip theft, there is no plan to address the practice through the province's Labour Standards Code.