You are here: Home - Household Bills - News -

Staff to receive 100% of restaurant tips

Written by: Emma Lunn
The government says new legislation to overhaul tipping practices will enhance the rights of 2 million hospitality workers.

Currently, many hospitality businesses which add a discretionary service charge onto customer’s bills keep part, or all, of this money instead of passing it onto staff. But under the new plans, all customer tips will go to staff.

Most hospitality workers, many of whom are earning the National Minimum Wage or National Living Wage, rely on tipping to top up their income.

Under the proposed legislation, the government will make it illegal for employers to withhold tips from workers. The move is set to help about 2 million people working in about 190,000 businesses across the hospitality, leisure and services sectors.

Paul Scully, labour markets minister, 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.”

Moves towards a cashless society have accelerated dodgy tipping practices, as an increase in card payments has made it easier for businesses to keep the funds.

About 80% of all UK tipping now happens by card, rather than cash going straight into the pockets of staff. Businesses who receive tips by card currently have the choice of whether to keep it or pass it on to workers.

The legislation will include a requirement for all employers to pass on tips to workers without any deductions. It will also include a statutory code of practice setting out how tips should be distributed to ensure fairness and transparency.

Workers will also have the right 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 it can be taken to an employment tribunal, where employers can be forced to compensate workers, often in addition to fines.

Union Unite welcomed the changes but criticised the government for delaying bringing in the legislation for five years. Back in May 2016 the then business secretary Sajid Javid said he planned to end unfair tipping practices.

Unite said based on a survey of its Pizza Express members, waiting staff were losing £2,000-a-year in ‘lost’ tips or an estimated £10,000 since the government’s 2016 announcement to clamp down on unfair tipping practices.

Sharon Graham, Unite general secretary, said: “It’s shocking that this group of mainly young workers has had to wait five years for government action to tackle the tips scandal. We will continue to challenge abuses in the workplace and Unite will keep fighting to improve the jobs, pay and conditions of the hospitality workforce.”

Related Posts

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week