Any change for a tip?
The government has recently announced plans to introduce legislation designed to ensure that service industry workers get all of the tips left by customers. This forms part of its modern ‘Industrial Strategy’ to end exploitative employment practices.
The government previously made a call for evidence on tipping practices in 2015, followed by a consultation on proposals to ensure fairness for workers. We blogged on the consultation at the time. The proposals in the consultation included:
- 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, it remains to be seen specifically 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.