Gov’t to remove tax on tips for tourism workers
Published:Monday | December 16, 2024 | 12:12 AMJanet Silvera/Gleaner Writer
WESTERN BUREAU:
The Government of Jamaica is seeking to reform labour-market arrangements in tourism with a plan that would see the removal of taxes on tips and require that 100 per cent of gratuity be paid to workers in the hospitality sector, says Minister of Tourism Edmund Bartlett.
Emphasising what he considers a need to restructure the tourism labour market, Bartlett, speaking on the eve of the winter tourist season, which started yesterday, said this would result in the establishment of a more professional and equitable system.
“The reform will include professionalising the industry by training, certifying, and classifying workers, with remuneration tied to their skill levels and qualifications,” Bartlett stated. “This approach mirrors the public sector’s merit-based classification system, ensuring equity and guaranteeing opportunities for qualified workers to access top positions within the industry.”
A central aspect of the reforms involves ensuring that gratuities and tips directly benefit workers. Bartlett said gratuities, charged as service fees on rooms, dining, and other services, should exclusively be paid to employees.
“The gratuity, which has been instituted as a service charge exclusively for the workers, we insist, must be paid to the workers, and if this was so, the salary levels within the industry, certainly, the take-home pay of the worker would easily be twice what it is,” Bartlett argued. “We are insisting that the gratuities be paid to the workers, and that we will remove the tips from the taxable income areas so that all tips to the tourism workers will be tax free.”
Bartlett’s declaration comes on the heels of protest action by tourism workers over the last three months that saw several hotels impacted by strike action from their employees, who have repeatedly accused operators of low wages, long hours, and the absence of contracts.
Gratuity is charged as a percentage on services and paid to workers, while tips, a voluntary payment made directly by visitors, are often collected and distributed among employees.
Housing provisions
Another proposed reform involves mandatory housing provisions.
Bartlett said future hotel investments of 500 rooms or more would require developers to allocate resources for worker housing.
“As tourism grows, it consumes local resources, and we want to prevent ‘overtourism’ injuries. By building infrastructure with housing for workers, we ensure sustainability while supporting the industry’s long-term growth,” Bartlett said.
He said the Government was also committed to ensuring that all tourism workers have access to pension benefits, securing their financial future.
In the meantime, with the recent protests fresh in mind, Bartlett called for restraint and urged workers to exercise patience as the Government implements the reforms.