According to a recent Federal Court of Appeal decision,
employers who receive electronic tips and gratuities from customers
(e.g. from debit and credit transactions and gift cards) and pass
them on to their employees may be required to pay CPP and EI
premiums on those tips and gratuities. This could have far-reaching
consequences for hair and nail salon, spa, pet grooming,
restaurant, café owners and any other business owner who
employs individuals who receive electronic tips from their
customers.
In Ristorante a Mano Limited v The Minister of National
Revenue (2022 FCA 151), the
Court held that cash tips did not attract CPP and EI premiums;
however, electronic tips (i.e. credit card, debit card, or gift
card) that are collected and then disbursed to the employee do. The
difference, the Court found, was that the electronic tips became
the property of the employer, as they were deposited in the
employer's bank account and commingled with their other funds.
Once
