Bosses banned from using tips as wages

Published on Wednesday 6 May 2009 21:14

USING tips to make up workers' pay to minimum wage levels will be outlawed from October, the government announced yesterday.

Ministers confirmed the move after a long campaign by unions, and said they wanted greater transparency and clarity for customers in bars and restaurants through a new code of practice.

Thousands of workers will be guaranteed fair wages, while customers will be confident their tips will not be used to make up staff pay, said the government.

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 to boost pay to the minimum.

"Our consultation showed wide support for these changes, including from business groups, and we are working with them to ensure that consumers get the information they need."

The announcement was the government's response to a consultation on the use of tips, gratuities, service charges and cover charges in payment of the national minimum wage.

Derek Simpson, Unite's joint general secretary, said the government had done the right thing.

He added: "Hard-working waiting staff will be delighted to learn that bad employers can no longer line their pockets with the money that customers intended to go to workers.

"This is a triumph for the poorly paid in restaurants, bars and hotels across the country.

"However, there remains a need for a fully transparent tipping system where 100 per cent of tips go to staff."

Steve Brooker, markets expert for Consumer Focus, said: "

"This is a victory for common sense, for employees and consumers."