Employers in the hospitality sector will not be able to use tips to make up minimum pay for their staff, following new rules that came into place today.
The government said the change would promote fairness and clarity for staff, customers and employers, despite claims from the British Hospitality Association that it will cost the hospitality industry an estimated £100 million and thousands of jobs.
Waitresses and waiters in bars, restaurants and hotels have previously been victims of a legal loophole whereby their salary is below minimum wage but boosted by tips.
Restaurants should now disclose to customers how they deal with discretionary service charge and non-cash tips, at least by a written note available for inspection at each restaurant and on the restaurant’s website, if it has one.
Tony Woodley, joint general secretary at the union Unite, said: “Unite is proud the government has heeded the concerns of waiting staff in their long-running campaign to close the loophole in the minimum wage regulations. Consumers were outraged when the union exposed that some employers were using tips and service charges to uplift the pay of staff to the minimum wage of £5.73. The change in the regulations today will be welcomed by workers in restaurants, pubs and hotels across the country.”
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