Waiting staff have secured a victory in the fight over tips after the government announced plans to close a loophole in the law which allows employers to use tips to make up wages.
Business Secretary John Hutton announced this morning that the government will be holding a consultation this autumn on proposals to:
- make it illegal to use gratuities and service charges processed through payroll to `top up` staff wages to meet the £5.52 per hour National Minimum Wage.
- encourage employers to make it clear to customers how their tips are being distributed among staff.
Hutton said: "This is an issue of fairness and common sense and it`s one many people clearly care a lot about.
"Under the current law, all workers are already entitled to receive the minimum wage. The changes we`re proposing will mean that in the future, tips cannot count towards payment of the minimum wage."
However, waiting staff could be worse off under the new proposals and change would have a "significant impact" on business costs according to the British Hospitality Association.
"I have yet to see proposals on this subject that have been thoroughly thought through," said BHA Chief Executive Bob Cotton: "At present, they have a potentially highly unfavourable impact on pay for staff. The only person to gain will be the tax man.
"If the government wants to make these changes, they should be considered over a longer period than is being proposed so that adjustments can be made to wages and selling prices."
Following the consultation, the government plans to issue guidance for employers and employees to ensure new regulations are followed. If approved, they are expected to be enforced some time next year.
Unite, the union which has been campaigning for fairness over pay for waiting staff today hailed the news a victory.
Derek Simpson, Unite Joint General Secretary said: "Waiters and waitresses across the country have been hungry for the tips loophole to be closed and the announcement today will satisfy their appetites. It is great news that unscrupulous employers will no longer be able to use the tips left for staff to subsidise low wages. Workers in restaurants, hotels and bars across the country have waited a long time for their just deserts."
Simpson said the campaign will continue "in order to bring transparency to the tipping system in bars, restaurants and hotels."
Both the Daily Mirror and the Independent newspapers have also run campaigns calling for fairer tips.
What do you think about the proposed changes to the law? Tell us your views here
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