Top-up tips outlawed from October

Using tips to make up staff pay to minimum wage levels will be outlawed from October this year, the Government announced today.

The Government said the move would ensure thousands of workers received a fair wage and boost consumer confidence in the use of tips.

There will also be a new industry code of best practice on greater transparency and clarity on the use of tips put together by the industry and the Government.

"When people leave a tip for staff, in a restaurant or anywhere else, they have a right to know that it will not be used to make up the minimum wage," said employment relations minister Pat McFadden.

"It is also important for employers to have a level playing field on wages. This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum.

"Our consultation showed wide support for these changes, including from business groups, and we are working with them to ensure that consumers get the information they need."

Steve Brooker, markets expert for Consumer Focus, said: "From October customers can be confident their tips will always go to waiting staff, which will allow employees to fully reap these rewards.

"In the meantime we would urge consumers to pay their tips in cash to ensure staff receive the full amount."

However, the British Hospitality Association criticised the timing of the new legislation.

"We have not opposed the introduction of legislation to prevent the proceeds of the service charge being used to augment the national minimum wage, but we are concerned that the government has decided to introduce legislation in October this year rather than wait until the recession subsides," said chief executive Bob Cotton.

"This is not the time to introduce a measure that will increase the industry's wage bill so significantly."

Good Food Guide editor Elizabeth Carter backed the changes. "When you leave a tip for good service, you expect it to be used to reward the staff that served you.

"Restaurants that use tips to replace wages are not only cheating their staff, but also misleading their customers, so it's high time this practice was outlawed."