The Government has announced plans to end unfair tipping practices and ensure additional payments for service are voluntary to the consumer, and received by workers in full.
The plans include updating the current voluntary code of practice, increasing transparency for consumers to make it clearer that tips are discretionary, and preventing or limiting any employer deduction from tips – except for those required under tax law.
The move follows The Independent's "fair tips, fair pay" campaign, which called for all restaurants to operate a fair, clear and transparent policy for distributing service charges and gratuities to their staff.
A survey by OpenTable found 87 per cent of UK customers always leave a tip and that the average tip is 9 per cent of the bill.
Currently, there is no legal requirement for the proportions of discretionary payments that go to employers and workers.
A call for evidence received nearly 200 responses, with worker groups calling for a requirement for 100 per cent of tips to be paid to workers.
There was broad agreement current practices were not clear for workers or consumers and change was needed to better understand how tips were distributed.
The Government is also considering whether to ban or restrict the levying of table sales charges – a fee paid by waiting staff based on their sales during a shift.
Business Secretary Sajid Javid said: “We’ve been very clear. As a one-nation government we want workers who earn a tip to be able to keep it.
"That’s why I, like many others, was disappointed by the tipping practices of some of our well-known chains. This has to change.
“Today I’m setting out our proposals to make tipping fairer, clamping down on unfair practices and securing a better deal for the millions of workers in the service industry. We will look closely at all the options, including legislation if necessary.”
Dave Turnbull, Unite's officer for the hospitality sector said: "This is fantastic news. It has taken us eight months to get this report to conclude but at long last it has come down on the side of the waiting staff.
"It is a massive victory for all those waiting staff who have worked tirelessly to expose sharp practices in the hospitality industry. All they want is what any worker wants – to take home what they have earned, no corners cut.
"But it will need the support of law to make this happen – it is patently obvious that too many employers do not respect the spirit or word of the voluntary code.
He added: "This should be great news for consumers, too, who have been appalled to learn that the tips they left for their waiter or waitress never made it to them. Diners have been a huge support to the workforce – without their help we may not have ever won pay justice.
"The problem has always been that tips paid on a credit card and service charges are deemed the property of the employer. As they own them they can do what they like with them. Until staff are recognised as the lawful owners of their hard-earned tips with complete control over how they are shared out, rogue employers will continue to cream off staff tips.
"The minister's announcement, therefore, should send the message right across the sector that the days of using workers' tips to top up pay or to be swallowed up elsewhere in a business are over."
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