'Disappointment' as Government shelves plans for tipping legislation

By James McAllister

- Last updated on GMT

'Disappointment' as Government shelves plans for tipping legislation

Related tags Service charge tipping Legislation Government

Plans to introduce legislation prohibiting hospitality firms from taking a proportion of staff tips or service charge have been shelved, with one industry body describing the move as 'disappointing'.

The Government's Business Minister, Paul Scully, announced plans to overhaul tipping practices back in September​, which would have made it illegal for employers to withhold tips and service charge payments from workers.

According to Government research published at the time, many businesses that add a discretionary service charge onto customer’s bills keep part or all of these service charges instead of passing them onto staff.

The idea to ban such practises have been on the back burner since being put forward by the Government in 2016, but the Financial Times ​is reporting​ that it has now been dropped from the Queen’s Speech on 10 May. 

According to one senior government figure, the plan has been scrapped 'for the foreseeable future'. Ministers had hoped to squeeze it into a proposed employment bill, but that legislation has been shelved.

Commenting on the FT​ report, Michael Kill, CEO of the Night Time Industries Association (NTIA), which represents more than 1,200 independent bars, clubs and live music venues across the UK, said: “Disappointed to hear the commitment by Government to ensure staff receive tips from employees, including those in restaurants, and don't have to share their tips with employers.

“At a time when the hospitality industry is dealing with record vacancy levels, attracting people into work in hospitality businesses is already difficult enough.

“Taking tips off staff at a time when the cost of living is going up and the potential external economic pressures on our staff need to be considered.”

The Department for Business, Energy and Industrial Strategy (BEIS) told the FT ​on Wednesday (4 May) that it could not pre-empt the contents of next week’s Queen’s Speech. However it did not deny that the plan had been dropped.

A spokesperson suggested the Government would encourage that 'industry best practice' on tipping should be applied by employers.

“Workers should absolutely get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service,” they said, adding that under existing legislation tips cannot count towards minimum wage pay.

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