Restaurant staff will keep 100% of their tips under new law
September 24, 2021, 1:28 p.m. | Updated: September 24, 2021, 1:29 PM
Bars and restaurants will now be prohibited from keeping tips earned by staff.
Restaurant staff will be able to keep any tips they earn under a landmark new law.
Under current law, hotel patrons are not allowed to keep tips in cash, but if the tip is paid by card, the restaurant can decide what to do with the money.
Many restaurants now add discretionary service on the bill, encouraging cashless payments.
This means that unless it has been agreed in the workers’ contracts, these tips could be allocated to the income of the company.
But ministers confirmed this week that a policy change will mean employers will be forced to pass on 100 per cent of tips and service charges to staff.
Restaurants and bars that break the new rules could lose an employment tribunal.
Business Secretary Kwasi Kwarteng is expected to announce his plans this week, with a Whitehall source telling the Mail on Sunday: ‘Workers who go the extra mile for their customers can now rest assured that their hard-earned tips will go straight into their pockets and no one else.
“We’re putting an end to questionable tipping practices and making sure that hard work pays off.
“We’re also leveling the playing field for businesses, ensuring that the good businesses that tip workers all the way aren’t undermined by the businesses that keep the money.”
Labor Markets Minister Paul Scully said: “Unfortunately some businesses choose to withhold money from hard-working staff who have received tips from customers as a reward for good service.
“Our plans will make this illegal and ensure that tips go to those who worked for it.
“It will give workers in pubs, cafes and restaurants across the country a boost, while reassuring customers that their money is going to those who deserve it.”
Despite plans, the law is not expected to change until late next year at the earliest.
Union Unite said the delay had cost wait staff up to £2,000 a year.
Meanwhile Graham Griffiths, director of the Living Wage Foundation, said more needs to be done to improve pay in hospitality.
He said: “Any initiative to improve pay in low-wage sectors like hospitality is welcome, but if this work is to be truly valued, we need to see more people being lifted towards a real living wage.
“We all need a salary that meets our daily needs, but too many people are stuck on a salary that keeps them afloat. Paying a living wage is good for businesses, the economy, workers and families.
“To build a stronger, more vibrant economy, we should focus on increasing the number of companies doing the right thing and committing to paying a living wage.”