New government measures to ensure that staff receive all tips and gratuities

Tips and gratuities in the workplace have often been in the news with various practices including allowing staff to retain their own tips to running a trunk system where tips are shared out.

There has been some consternation at some of the practices implemented by employers where a percentage of tips are hived off for the benefit of those employers.

The Prime Minister, Theresa May is to announce measures at this year’s conservative party conference to ensure that restaurant staff working in high street chains receive all their tips from customers.

The conservative party has claimed that high street chains such as Belgo, Bella Italia, Cafe Rouge, Giraffe, Prezzo and Strada are amongst those who have made deductions of 10% of tips whilst Zizzi and Ask have taken 8%.

The Prime Minister said that this area needs reform and will apply across England, Scotland and Wales and were part of the Government’s work to crack down on exploitative employment practices. She said ‘The unemployment rate under this Government is now the lowest since the 1970’s – but we want to ensure that everyone is treated fairly in the workplace….That’s why we will introduce tough new legislation to ensure that workers get to keep all of their tips – banning employers from making any deductions’.

The Trade Union Unite is backing staff at some of the American chain’s restaurants where there have been protests over decisions to redirect some tips paid on credit cards from waiting staff to boost the wages of lower paid kitchen staff, as well as challenging numerous breaches to the national minimum wage and other contractual entitlements. There are also scams where restaurants take tips aimed for their staff to boost their profits.

Dave Turnbull of Unite said ‘This step in tackling tipping abuses has been a long time coming and is in no small part down to the determined campaigning of Unite and its members. As ever the devil will be in the detail of the legislation the Government brings forward.

Whilst these developments are to be welcomed surely these reforms should be rolled out across the service sector and not just confined to high street restaurants. That is one flaw in these proposals and we will need to await the details of the proposed legislation to understand how in practice it will work.

If you have any questions relating to your entitlement to tips in the workplace then contact our Head of Employment and Senior Associate – Steven Eckett.