Restaurant staff will keep 100 per cent of their tips under new law

24 September 2021, 13:28 | Updated: 24 September 2021, 13:29

By Heart

@thisisheart

Bars and restaurants will now be banned from keeping tips which have been earned by staff.

Restaurant staff will get to keep all the tips they earn under a landmark new law.

Under current legislation, hospitality bosses aren’t allowed to keep hold of any cash tips, but if gratuity is paid on card then the restaurant can decide what to do with the money.

Many restaurants also now add a discretionary service onto the bill, encouraging cashless payments.

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This means that unless it has been agreed in workers’ contracts, these tips could go towards the business’ revenues.

But ministers confirmed this week a change in policy means that employers will be forced to pass on 100% of tips and service charges to staff.

Restaurants and bars that break the new rules could lose an Employment Tribunal.

Business Secretary Kwasi Kwarteng is expected to announce plans this week, with a Whitehall source telling the Mail on Sunday: “Workers going above and beyond for their customers can now rest assured that their hard-earned tips will be going directly in their pockets and nobody else’s.

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“We’re putting an end to dodgy tipping practices and making sure that hard work pays off.

“We are also levelling the playing field for businesses, ensuring that good firms which give all the tips to workers are not undercut by the firms which keep the money.”

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.”

Despite the plans, the law is not actually expected to change until the end of next year at the earliest.

The trade union Unite has said the delay has cost waiting staff up to £2,000 a year.

Meanwhile, Graham Griffiths, Director of the Living Wage Foundation, has said more needs to be done to improve pay in hospitality.

He said: “Any move to improve pay in low-paid sectors like hospitality is welcome, but if this work is to be truly valued we need to see more people lifted onto a real Living Wage.

“We all need a wage that meets our everyday needs, but too many people are stuck on pay that leaves them struggling to stay afloat. Paying a Living Wage is good for businesses, the economy, workers and families.

“To build a stronger and more dynamic economy our focus should be on increasing the number of businesses doing the right thing and committing to pay a Living Wage.”