Restaurants to be banned from withholding tips from workers in new government bill

Around two million workers stand to benefit from the new bill, which would see them receiving 100 per cent of the service charge

Zaina Alibhai
Friday 24 September 2021 09:44

Restaurant, bar and cafe owners will not be allowed to withhold tips left for staff as the government introduces new legislation.

It will become illegal for companies to keep tips for itself, a move that will potentially help two million workers, as part of new plans.

Members of staff will also be able to request to see tipping records, and take employers to a tribunal if they felt tips had been withheld.

New laws will also see the small processing fee some venues charged its workers for tips left by credit and debit cards abolished, becoming illegal for the charges to be added.

The government said research showed many businesses added discretionary service charges to customers’ bills only to keep the payment for themselves rather than sharing it amongst staff.

The issue was highlighted several years ago when restaurant chains such as Cote and Bills were using the service charge to top up managers’ salaries.

Typically, managers were paid the minimum wage on the understanding that their salary would be topped up to between £35,000 and £40,000 a year through the tronc systems.

Labour markets minister Paul Scully said: "Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.

"Our plans will make this illegal and ensure tips will go to those who worked for it. This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it."

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