BHA publishes voluntary code on tips

Pubs are being urged to give customers information on how tips are distributed to staff, in a bid to ward off legislation.

The British Hospitality Association (BHA) has drawn up a voluntary code of practice after discussions with the Department for Business on the issue, which has put the restaurant industry in the media spotlight.

The revelation that many high profile operators hold back service charges, deduct large administration fees and use tips to bring staff up to the minimum wage prompted outrage from customers.

The government has already moved to change the law on the minimum wage, but there have been calls from unions for even tougher action.

The BHA code says that a written note should be available for inspection on the premises and on the establishment's website, if there is one, which should explain:

• whether an amount is deducted for handling costs, and how much
• how the remainder is shared between the businesss and the employee
• the process for distribution - for example, if the money is shared through a system controlled by a representative of the employees.

Bob Cotton, BHA chief executive, said: "We've had too little information in the past about the way the service charge is collected, what it is for and who receives it. This has given rise to widespread criticism which has damaged the industry's reputation."

Members of the BHA have already accepted the code and will implement it in time for the introduction, on October 1, of the legislation, banning the service charge being used to make up the minimum wage.

Cotton said a voluntary code was far preferable to a statutory instrument "which I've no doubt government would be keen to introduce if the code is not widely accepted by the industry".