New plans to overhaul tipping practices have been set out by the government to stop employers withholding tips awarded to their staff. With many earning the National Minimum Wage or National Living Wage, hospitality workers often rely on tips to top up their income. But research shows that many businesses that add a discretionary service charge onto customer’s bills are keeping part or all of these service charges, instead of passing them onto staff. In recent years the shift from cash payments to card payments have made it easier for businesses to do this.
The 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.
Welcoming the plans, Central Devon MP Mel Stride said:
“Hospitality workers play a vital role in the local economy here in Central Devon. Employers should not be withholding tips that their workers have worked hard for by providing good customer service.”