The Government is preparing legislation that would ban employers in the service industry from using tips to help pay workers' wages and require businesses to display their policies on tipping.

It follows criticism of some businesses that were not allowing staff to take home the full amount of tips they had received during a shift.

Minister for Employment and Social Protection Regina Doherty said Ireland has a problem with ownership of tips that must be addressed.

She said: "The vast majority of employers are very good and recognise that a tip is a gift between the patron of the restaurant or hotel and the person that is giving them the service.

"But there are a small number of employers who seem to think that it's okay to take those tips and use them as part of wages for the employees or keep them for themselves.

"There has been a clear message sent out by every member of the Dáil and Seanad today is that is not on."

James Larkin from Mullingar says he worked in three different restaurants and his tips were deducted in different ways.

He said: "A common occurrence was for 10% of your tips to be taken through breakages and that was whether you broke anything or not. Another way was that when you were in training none of your tips went to you.

"Other things would happen like tips would be taken if the till didn't balance at the end of the day which is a very common experience and at the end of it all you end up with little or none of your tips."

Meanwhile, a Sinn Féin Bill, which aims to give restaurant workers a legal right to their tips, was passed in the Seanad today.

However, the Government opposes this bill on the basis that a report earlier this year by the Low Pay Commission advised against primary legislation in this area.

The LPC said that such a change could have unintended consequences, and end up in workers receiving even lower take home pay.

Sinn Féin Senator Paul Gavan told the Seanad today that the Government's proposals do not go far enough.

He said: "The bill that you say you are going to produce, a bill which nobody had heard of until yesterday after eight years in Government, but you say there is a bill now in the offing, but it doesn't tackle the key legal issue to give hospitality workers a legal right to their tips and that's what we need."

Mr Gavan said there was a wrong being done to workers in the sector and he said the Sinn Féin bill would address this.

He said: "This bill gives hospitality workers a right to their tips. That's at the heart of this bill and we know from research that one in three workers do not get their tips. The bill also requires restaurants to display their tipping policy.

"We believe that all workers who deliver a service and where a service charge is paid should get that fee."

Yesterday, the chief executive of the Restaurants Association of Ireland said the organisation supports the minister's plan.

Adrian Cummins said it was a workable solution for business owners that provides certainty for staff and transparency for customers.

Earlier this year, the RAI advised its members to display their policy on tips and gratuities.

The issue was also raised in the Dáil earlier this year when the tips policy at a restaurant in Dublin city centre was highlighted.

At the time, Tánaiste Simon Coveney warned that it was illegal to calculate workers' salaries by including customer tips in that figure.

The Government said it expects to bring a memo to Cabinet on its proposals next week.

Additional reporting: Ingrid Miley, Edel McAllister