As part of a series of new measures to support workers by ending exploitative employment practices, the Government has announced that it intends to introduce legislation to prevent employers from taking tips and gratuities that should go to staff. This is to prevent ‘poor tipping practices’, including excessive deductions being made from tips left by customers. It is unclear yet whether legislation will require tips to be shared with kitchen staff to prevent newly hired waiting staff receiving overall a higher income in combined wages and tips than operators can afford to pay trained staff such as chefs.
Cash v Card
Currently all tips left in cash must go directly to staff, whereas if tips or service charges are paid by card the employer may make deductions to cover breakages, credit card fees etc, before passing the remainder on to staff. The Government is committed to legislating so that all tips go to staff.
Is legislation necessary?
UK Hospitality, representing the hospitality sector, believes that legislation is unnecessary, saying that there is no evidence of tips being withheld by operators. It issued a voluntary code of practice on tipping to its members last year, and allowed in this for small businesses to retain a small deduction from tips to cover credit card processing fees.
This is the first announcement on tips from the Government since its consultation on tipping and service charges closed over 2 years ago. There is no timescale for new legislation as yet, the only indication being that it will introduce the new legislation at ‘the earliest opportunity’.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.