Workers’ rights: new laws to crack down on “shameful tipping practices”

New laws will make it illegal for businesses to withhold tips from workers, the Government has confirmed.

Restaurants, bars and other hospitality firms are currently under no obligation to pass on service charges to staff as intended.

But the Government says it plans to tackle “shameful tipping practices” to ensure waiters, waitresses and bartenders receive the pay they are entitled to.

According to the Department for Business, Energy & Industrial Strategy (BEIS), most hospitality workers rely on tips to top up their income. This can come in the form of cash tips, paid directly to the worker, or as a service charge – a discretionary bill of between 10 and 20 per cent added to the customer’s bill.

But the latest research suggests that “many businesses” are “keeping part or all of these service charges”.

The study also found that the move towards a “cashless society” has made it easier for businesses to hold onto service charges; some 80 per cent of all tips are now paid for by card.

While making withholding tips illegal, the new legislation will also set out a Statutory Code of Practice outlining how tips should be distributed, as well as new rights for workers to request information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal.

The move will support around two million staff who work in the hospitality and services sector.

Commenting on the changes, Labour Markets Minister Paul Scully said: “Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.

“Our plans will make this illegal and ensure tips will go to those who worked for it. This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it.”

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