Tips not allowed as wages top up

By John Harrington john.harrington@william-reed.co.u

- Last updated on GMT

Related tags: National minimum wage, Minimum wage, Hmrc

HMRC pleased appeal on 'troncs' successful Tips paid to staff via a common pool cannot be included in national minimum wage (NMW) calculations after...

HMRC pleased appeal on 'troncs' successful

Tips paid to staff via a common pool cannot be included in national minimum wage (NMW) calculations after a High Court ruling.

That's according to HM Revenue & Customs (HMRC) after a successful appeal on the question of "troncs" — tips pooled centrally then shared among employees.

HMRC appealed after

losing an Employment Tribunal case against London

restaurant and nightclub Annabel's.

The operator argued that troncs can be counted towards NMW because the money comes from the company and not directly from customers.

Under the new ruling at the Employment Appeal

Tribunal, only money paid directly through the staff payroll can count towards NMW.

HMRC spokeswoman Denise Gaston said: "Our priority is to ensure that all workers are paid at least the national minimum wage. We are very pleased that the court has recognised our commitment to ensuring that tips are fairly distributed to the people who earn them.

"This is good news for bar and restaurant workers across the UK."

However, Morning Advertiser legal editor Peter Coulson said uncertainties still exist about tips and the minimum wage.

For example, it remains unclear whether mandatory service charges can be treated in the same way as voluntary tips from customers. "Even after this judgment the situation is far from straightforward, and great care will have to be taken by all licensees who are involved with any form of tips paid to staff," said Coulson.

Annabel's has until 27

June to lodge an appeal.

n Coulson — p24

Related topics: Other operators

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