Unfair top-up tips to be banned
6 May, 2009
Pubs told new law will come into force this year
The practice of using tips to boost staff pay to minimum wage levels will be outlawed from October this year, the government has announced.
The move is intended to ensure fair wages for thousands of workers and increase consumer confidence in the use of tips.
Paul Boggia from award winning food pub, the Kingston Arms in Cambridge, said: “I think it is the right thing to do. I don’t see how anyone can justify dipping into tips which have been given at customers’ discretion to staff.
“It is not often the government gets something right but in this case it has.”
The government is also planning to introduce a new industry code of best practice to provide greater transparency for consumers.
Employment relations minister Pat McFadden said: “When people leave a tip for staff, in a restaurant or anywhere else, they have a right to know that it will not be used to make up the minimum wage. It is also important for employers to have a level playing field on wages.
“This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum.”
Readers' comments
It's called the "Tip Credit" in the states and without it a large percentage of hospitality retailers would be out of business in the states. My servers and bartenders make approx. $35 an hour on tips. My kitchen staff and support people all make more then the minimum wage. So every ones happy! If the tip credit is lost I will schedule less server and bar tender hours because there is no money to pay the extra wages. Service staff will get less of those $35 hours, seem fair? Your situation in the UK is like the animals running the zoo. Every one knows how to run somthing as easy and lucrative as a bar but not any one making up the laws have tried to make one work. The situation in the UK is comical, as so much time and energy is focussed on our industry and the many tough problems facing the UK are ignored. The UK needs a leader, we may have one in Obama (just in time), hope you find a few before it's to late for the pubs and your country.
Thats a bit like calling the pot or is it the kettle. Anyway MPs expenses and all that. Didn't some MPs say that was a way of topping up their salaries. Rules should be rules . whats good for one should be the same for others and no exceptions MR BROWN !!!
very clever mr brown and labour government ..... i agree 100% about tips should not be included as min wage but service charge should not be included . staff who work hard and earn a good living using the self manage tronc system ... now will pay national insurance and so will companies . many restaurants will now go bankrupt ... the only winner here is the government ..
I really did not know that this was going on with tips making up wages. I know it is done in the USA, but I thought it was against the law? In my opinion you should be ashamed of yourselves if you are doing this, and would like to ask the question if, as an employer, are showing this as an income and paying it out as wages, then you are liable for tax on it, before you pay it out again. plus the VAT content? any comments please?