Restaurant customers should be told where tips go, minister says

The Business Secretary, John Hutton, will announce today that restaurants will no longer be allowed to pay below the minimum wage of £5.52 per hour and make up the difference using tips and service charges.

In a landmark victory for The Independent's "fair tips, fair pay" campaign, the changes will stop some of Britain's biggest restaurant chains exploiting the loophole in minimum wage legislation. After a consultation this autumn, the Government will introduce legislation closing the loophole next year, to coincide with the 10th anniversary of the national minimum wage law.

Mr Hutton said: "When people leave a tip they expect it to go to service staff and, as consumers, we've got a right to know if that actually happens."

"This is an issue of fairness and common sense and it's one many people clearly care a lot about. The changes we're proposing will mean that, in the future, tips cannot count towards payment of the minimum wage.

"We also want to encourage employers to make it clear how tips are distributed so that customers know where their money is going and whether or not the establishment operates a fair tipping policy."

Campaigners pointed out the announcement stopped short of a commitment to force restaurants to clearly state their policies on whether tips go to the restaurant or waiting staff.

Several restaurants investigated by The Independent will have to change the way they pay staff. Chains including Café Rouge, Strada and Caffè Uno use service charges to "top up" to minimum wage, which will rise to £5.73 per hour for adults aged over 21 in October. In one case, Tuttons, a restaurant in Covent Garden, London, admitted it used only its 15 per cent "discretionary service charge" to pay staff, who received a basic wage of zero pounds.

Dave Turnbull, the industrial organiser at the union Unite, said: "It's what we've been pushing for and is definitely a major step forwards. It breaks down the barrier we had in the past where restaurants said what they were doing is perfectly legal so they could do what they wanted." Paul Kenny, general secretary of the GMB union, added: "Far too many rogue employers have been using tips to make up the minimum wage. The quicker this is ended completely, the better."

A former waiter at the Paternoster Chop House, a London restaurant owned by D&D London (formerly Conran Restaurants), who resigned when he learned his basic wage would be £1.88 an hour, called the news "fantastic". He added: "If The Independent's campaign is going to make a difference to people so they get the minimum wage plus a share of the tips then that's good for everybody. Customers will know their waiter is being paid a fair wage and will be rewarded for good service."

Bob Cotton, the chief executive of the British Hospitality Association, said the proposals needed more consideration. "At present, they have a potentially highly unfavourable impact on pay for staff," he said. "The only person to gain will be the tax man."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
Sport
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
News
'We will fix it': mice in the 1970s children’s programme Bagpuss
science
Life and Style
2 Karl Lagerfeld and Choupette
fashion
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Customer Service Executive

£18000 - £22000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Retail Buyer / Ecommerce Buyer

£30000 - £35000 per annum: Recruitment Genius: Working closely with the market...

Recruitment Genius: Sales Executive - CAD Software Solutions Sales

£20000 - £50000 per annum: Recruitment Genius: A reputable company, famed for ...

Ashdown Group: Client Accountant Team Manager - Reading

Negotiable: Ashdown Group: The Ashdown Group has been engaged by a highly resp...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?