Government U-turns on new rules to protect staff tips

Government U-turns on new rules to protect staff tips
The government has ditched plans to change the law to ensure restaurant and other hospitality staff get to keep 100% of their tips.
Last Autumn the government pledged to make it illegal for businesses to withhold tips from their workers after research found that many of them added a discretionary service charge to their customer’s bills but kept the money instead of passing it onto staff.
However, the dropping of the proposal from the Queen’s Speech (on 10 May) has been condemned by TUC boss Frances O’Grady, who labelled the move a betrayal and condemned the government for “conning working people”.
The plan has been dropped “for the foreseeable future” according to one senior government official as reported in The Times. This means that the proposal will not be on the government’s agenda of policies to be pushed through parliament. Ministers had hoped to include the change into a proposed employment bill; however, that legislation has now been shelved.
Under existing legislation tips cannot count towards minimum wage pay. However, many staff working in hospitality are paid either the National Living Wage or National Minimum Wage and so tipping is strongly encouraged. Service charges, which are not the same as a tip, can be added to bills as either “discretionary” or “compulsory.” Nevertheless, these charges are subject to no specific legal rules and therefore businesses can decide whether to keep the charges to cover other business costs or pass it onto employees.