Plans to Make Tips Fairer
The government has unveiled plans to ensure tips for service staff are passed on and not used towards their wages.Ministers on Wednesday announced a consultation to prevent employers from using tips or service charges in the hospitality industry towards the payment of the minimum wage.
Currently, gratuities cannot count towards the minimum wage when they are given directly to workers by customers, but they can when they are paid by the employer to the worker via the payroll.
Employment relations minister Pat McFadden said: "When people leave a tip they expect it to go to staff on top of their pay, not to be used to make up the minimum wage. This is an issue of fairness and common sense.
"We intend to amend regulations so that tips can no longer count towards payment of the national minimum wage.
"We also want employers to make it clear how they distribute tips so that customers know where their money is going.
"It's crucial we get these changes right and we are keen to hear everyone's ideas as part of our consultation."
The consultation will also consider proposals for a code of practice to provide guidance on ways of distributing tips and keeping customers informed.
Shadow business secretary Alan Duncan said: "People who leave a tip rightly expect that it will go to the person who served them, not be kept by their employer in order to keep their wage bill down.
"Just two weeks ago, Pat McFadden called our plans to stop employers counting tips towards salaries meaningless - what's more meaningless is yet another government consultation.
"Low paid workers struggling to pay their bills need action right now to let them keep what's rightfully theirs, not more vague proposals and discussion groups."
The Unite union called on the government to ensure staff in bars, hotels and restaurants get all of their tips, service charges and gratuities.
Joint general secretary Derek Simpson said: "The Unite campaign for fair tips has demonstrated the disgraceful lengths that some employers will go to in order to line their pockets with tips left for their staff.
"The government must take urgent action to close the minimum wage loophole. This will ensure rogue employers can no longer use money left by their customers, to thank those who served them, to boost their profits."
"The union will not accept a situation whereby the industry which has so far publicly denied the concerns of their staff and customers around tipping, to be allowed to merely go on regulating themselves. Government action is overdue as staff must not be forced to wait on their employer."
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