Thank you for contacting me about the payment of tips.
In some sectors, tips are a significant part of staff income and it is only right that workers keep the full value of tips left in recognition of good service and hard work. Most hospitality workers, for example, many of whom are earning the National Minimum Wage or National Living Wage, rely on tipping to top up their income. I find it concerning that research shows that many businesses that add a discretionary service charge onto customer’s bills are keeping part or all of these service charges, instead of passing them onto staff.
I therefore welcome that, following a consultation, the Government is set to make it illegal for employers to withhold tips from workers. This will help around two million people working in the 190,000 businesses across the hospitality, leisure and services sectors, where tipping is commonplace. In addition, the new measures will create consistency for those being tipped by cash or card, while ensuring businesses that already pass on tips fairly aren’t penalised.
Customers will be reassured to know that their tips are going in full to workers and not businesses, helping ensure workers receive a fair day’s pay for a fair day’s work.
If an employer breaks the rules they can be taken to an Employment Tribunal, where employees can be forced to compensate workers, often in addition to fines.
The plans are part of a broader range of measures that protect and enhance workers’ rights. In the past 18 months alone, the Government has introduced parental bereavement leave, protected new parents on furlough, and given millions a pay rise through a higher minimum wage.
Thank you again for taking the time to contact me.