Should Employer’s be allowed to take Employee’s Tips?
Should Employer’s be allowed to take Employee’s Tips? – 03/12/2019
Plans have been announced for a new legal obligation to be implemented in the UK, which would ensure that employers’ hand over all tips to their employees.
This will be created via a bill and has been in the pipeline for several months. Simply this means employers will have to distribute tips among workers “on a fair and transparent basis”. With the principles being set out in the proposed bill.
In the hospitality sector, tips, gratuities and service charges make up a significant share of employees’ income these roles typically pay minimum wage and employees rely on tips to make up their wages. However, recent research has discovered that a minority of employers retain at least 10% of their workers’ tips which some even keeping the entirety of tips received.
However, this new bill does not come without its challenges. Unfair tipping practices are becoming harder to track due to societal change in consumer spending. There is an increasing number of consumers now paying tips on card rather than in cash directly to the workers, with approximately 80% of tips are now gifted on card.
The focus on this proposed bill has been ongoing as a result of the UK campaign Fair Tips, Fair Pay Campaign which revealed that a number of large restaurant chains were taking staff tips and using them as a method of ‘top up’ for the wages of employees who were being paid under the minimum wage threshold.
If this bill is voted on and passed, this bill will apply to England, Wales and Scotland. However, Northern Ireland won't be protected by the new bill as a result of Stormont suspension.
Similarly, to this the Republic of Ireland have made arrangements to amend the Payment of Wages Act. This amendment means that employers that fail to clearly display their policy on their premises will be subject to a fine.
“When you tip your server well, you're spreading goodwill and love.” ? Bert McCoy