Calculating paid leave for workers receiving gratuities and service charges as part of their minimum hourly wage rate has been cleared up with amendments to the island’s employment legislation.

Jason Hayward, the Minister of Economy and Labour, told the House of Assembly that the Employment Amendment Act 2025 would avert confusion over the lack of a proper definition for a gratuity or service charge in the principal Act.

He said both had ended up being considered as “tips”, separate from wages that had affected payment for staff who received other gratuities.

It meant that legislation that came into force last year protecting tips had “fundamentally changed” the determination of paid statutory leave entitlement for workers who “receive other gratuities and whose wages vary from week to week”.

Mr Hayward said that while employers were permitted to include “other gratuities” for the minimum $16.40 hourly wage rate, it was “never intended for other gratuities to be included in the definition of a week’s wages”.

He said that interpreting other gratuities as wages had made calculating a week’s pay “extremely unpredictable”, imposing a financial burden on businesses.

Mr Hayward said the ministry had met with the Bermuda Hotel Association and the Labour Advisory Council to reach a consensus.

They agreed that “other gratuities” would not factor into the paid-leave entitlement, beyond the required minimum hourly wage rate still to be met by employers.

The Bill will come into force retroactively to coincide with the March 1, 2024 enforcement date of the tips and gratuities legislation.

Mr Hayward added: “The Bill provides that any payment of other gratuities which took place between March 1, 2024 and now shall not constitute an overpayment to which an employer is entitled to be reimbursed.”

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• To read Jason Hayward’s ministerial statement in full, see Related Media