Future of Work

Measures to help staff keep more of their tips and make it clearer to customers that they are optional have been proposed by the government. It follows claims that some restaurant chains were regularly holding back some or all of the tips meant for staff.

Business Secretary Sajid Javid said the plan would “make tipping fairer” for millions of service industry workers. The Unite union said it was a “massive victory” for waiting staff who want to “take home what they have earned”.

There will be a two-month consultation on the proposals, which the government said would stamp out unfairness. The proposals include:

  • making it clearer for customers that tips are optional
  • preventing or limiting any employer deduction from tips except for those required under tax law
  • and updating the existing voluntary code of practicefrom the government and putting it on a statutory footing to increase employer compliance

Business Secretary Sajid Javid said the government had always been very clear that it wanted “workers who earn a tip to be able to keep it.

“That’s why I, like many others, was disappointed by the tipping practices of some of our well-known chains. This has to change. Today I’m setting out our proposals to make tipping fairer, clamping down on unfair practices and securing a better deal for the millions of workers in the service industry.

“We will look closely at all the options, including legislation if necessary,” Mr Javid said. Unite had been campaigning for action after complaining that some firms were counting tips as part of a worker’s pay.

Announcing its consultation, the government said that 80% of consumers want to see tips go directly to workers or distributed among staff.

‘Rogue employers’

Dave Turnbull, Unite’s officer for the hospitality sector said it would need the support of the law to make any change effective.

“The problem has always been that tips paid on a credit card and service charges are deemed the property of the employer,” he said.

“As they own them they can do what they like with them. Until staff are recognised as the lawful owners of their hard-earned tips with complete control over how they are shared out, rogue employers will continue to cream off staff tips.”

But he said the proposals were a “massive victory for all those waiting staff who have worked tirelessly to expose sharp practices in the hospitality industry”.

“All they want is what any worker wants – to take home what they have earned, no corners cut,” he said.

The British Hospitality Association (BHA), which represents more than 40,000 establishments in the UK, said the proposals should help make tipping clearer for workers and consumers.

BHA chief executive Ufi Ibrahim said: “Customers should be able to reward good service and know where their money ends up and how much of it goes to the staff.”

She said the BHA will meet with hospitality business leaders across the UK and conduct its own impact assessment.

The consultation period runs until 27 June 2016.

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