New Government plans for all tips to go to staff.

24 Sep

In an announcement from the Department for Business, Energy & Industrial Strategy on Friday, the Government announced plans for all tips to go to staff as part of plans to enhance rights of workers. Tips already cannot be used to count towards minimum wage pay and this has been the case since 2009.

The Government intend to now go further and make it illegal:

“…for employers to withhold tips from workers. The move is set to help around 2 million people working in one of the 190,000 businesses across the hospitality, leisure and services sectors, where tipping is common place and can make up a large part of their income.

This will ensure customers know tips are going in full to workers and not businesses, ensuring workers receive a fair day’s pay for a fair day’s work.”

Labour Markets Minister Paul Scully said:

“Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.

Our plans will make this illegal and ensure tips will go to those who worked for it. This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it.”

The proposed legislation will include:

  • a requirement for all employers to pass on tips to workers without any deductions
  • a Statutory Code of Practice setting out how tips should be distributed to ensure fairness and transparency
  • new rights for workers to make a request for information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal

Under the changes, if an employer breaks the rules they can be taken to an Employment Tribunal, where employers can be forced to compensate workers, often in addition to fines.

Tipping legislation will form part of a package of measures which are intended to provide further protection around workers’ rights, yet to be fully announced.

Law correct at the date of publication.
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