New legislation will ban bars and restaurants from using the term ‘service charge’ unless the money is going directly to employees.

As part of legislation to make tips more transparent, any mandatory service charge will have to go to staff.

It must be stated clearly where any extra charges are going if the money isn’t being treated as a tip.

Enterprise Minister Leo Varadkar has said it’s not acceptable people are being asked to pay with no idea where the money is going.

“Customers really can’t be sure what services charges are used for or whom they go to. Voluntary services charges are clearly the same as a tip or a gratuity but by definition, mandatory service charges are not.”

“As things stand, you’re expected to pay, without any information on where the money goes. “I’m happy we’ve been able to come up with a solution now, which will effectively ban employers from using the term ‘service charge’ or any similar term, unless the money goes straight to staff.”