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Business Secretary to put forward proposals to ensure restaurant tips go to individual staff members

View profile for Spencer Davis
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Sajid Javid, the Business Secretary, has said that restaurant tips should go to the individual workers, and not be deducted by their employers to make up pay. Proposals have been announced that attempt to limit these employer deductions, with a consultation on the proposals to conclude on the 27 June 2016.

The proposals include making it clearer that gratuities are voluntary only, preventing or limiting employer deductions from tips (except where compliance with tax legislation requires it), and updating the existing Government voluntary Code of Practice to put the proposals on a statutory footing, in an attempt to increase employer compliance. Mr Javid has even said that, if necessary, he will attempt to put through legislation on the matter. 

It has been found that some restaurant chains regularly hold back tips. There is currently no legal requirement to give tips to waiting staff, but the proposals seek to change this. 

In the meantime the British Hospitality Association (BHA) will meet with hospitality leaders across the UK and conduct its own impact assessment.

Some restaurants have already scrapped their administration fees charged against staff tips made by debit/ credit card.

The Unite Union has been campaigning for action for some time regarding employer deductions from tips, and representatives have themselves commented on the need for legal backing.

If you are an employee who has been or may be affected by proposed cuts to your current terms of employment, or are an employer concerned that there is a need to offset, the increase in your wage bill to ensure ongoing viability of your business, then please contact Alexandra Dean (deana@gepp.co.uk or on 01245 228141) who is a Partner at Gepp & Sons specialising in Employment Law.

This is not legal advice; it is intended to provide information of general interest about current legal issues.