Why tipping just got fairer

Here’s some good news – particularly if you happen to work in the hospitality industry.

New Government legislation is being planned which will ensure you get to keep the tips that happy customers leave to thank you for your service.

It will put an end to the practice of companies adding a ‘discretionary’ service charge to a bill and then pocketing the extra cash themselves.

The Government says the move will help workers – and especially those in the hospitality industry – top up their wages with confidence and will help around 2 million people working in the 190,000 businesses across the hospitality, leisure and services sectors.

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 Government says the increasing use of cards and mobile devices for cashless payments has made it easier for businesses to keep tips – with 80 per cent of tips now made by card. Businesses which take tips by card currently have the choice of whether to keep them or hand them on to the staff involved.

 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

And there’s the prospect of facing an Employment Tribunal for any employer who breaks the rules, where they can be ordered to pay not only compensation but also fines.

The new measures will offer a significant improvement in rights for workers who receive tips – but don’t always see the money – and also give customers the confidence that they know exactly where their tips are going.

Good news all round from what we can tell.

If you are struggling to get an employer to hand over tips left for your good service, we can help. Just click the button on this page to start a free, friendly consultation. We’re on your side.

If you would like to discuss these issues, or other HR concerns then please

Contact Us