Government Reforms (3): Top tips for staff

The Government has announced plans (available here) to ensure that tips left for workers will go to them in full.  This forms part of its modern ‘Industrial Strategy’ to end exploitative employment practices.

While the Government acknowledges that most employers act in good faith, in some sectors evidence points towards poor tipping practices, including excessive deductions being made from tips left by customers.

New legislation, to be introduced at the earliest opportunity, will set out that tips must go to the workers providing the service.

The Government previously made a call for evidence on tipping practices in 2015, followed by a consultation which included the following proposals:

• updating the voluntary code of practice on discretionary service payments to put it on a statutory footing;
• increasing transparency for consumers to ensure that discretionary payments for service are truly voluntary; and
• preventing or limiting any employer deduction (e.g. administration fees) from discretionary payment for service (other than tax deductions).

The Government is clear that ‘tips must go to the workers providing the service’. However, we wait to see what the new proposed legislation will cover, in particular whether it will address the practice of employers using tips left for waiting staff to subsidise the wages of others such as kitchen workers.