What effects does the new tipping law have?

The new tipping law came into force this week, which prohibits cardholders from charging fees on the gratuities they give to workers and which has the objective of favoring the employees who depend on them.

In mid-December of last year, Senate unanimously approved the initiative of the Colorado deputy Sebastian Sanguinettiwhich had previously been approved in the House of Representatives (Deputies)turning the initiative under number 20,243 into law.

Deputy Sanguinetti celebrated the publication of the regulations and assured that the impact is being positive. “Yesterday, Law 20,243 on tips came into effect. It is important that this new regulation be complied with to guarantee the improvement of the income of thousands of workers. Based on the information we have on workers and merchants, the impact is being very positive,” published on his social networks.

What does the law propose?

The regulations, which regulate the tip payment through electronic means, guarantees the worker receive 100% of the tips through any means, in addition to the classic cash payment.

Although the law will not force businesses to receive payments by card, if they do receive them, they will be obliged to accept, if the customer so requires, payment of the tip through that means.

According to article 1, “the employer has the obligation to apply the technology available so that customers can include tips in the transaction and by the same payment method by which payment is made for the service or product to which the tip is included.

In turn, the employer must settle the total amount of tips within the deadlines established by law, or according to the collective agreements of each company. Payment of tips by customers will continue to be voluntary, and there is no minimum amount required.

In article 4, it is clarified that “the financial institutions members of the payment system are obliged to take the necessary measures for the application of the following law”, therefore, according to article 5, “they will not be able to charge any type of commission, charge, surcharge or discount, to the sum or funds from the payment of tips.