The UK government plans to make it illegal for restaurants, cafés, pubs and other hospitality firms to withhold tips from workers.
A significant number of workers in the local hospitality sector are paid the National Minimum Wage or the National Living Wage which means they rely on tips to top up their salaries.
Labour Markets Minister Paul Scully states that this change will help “ensure tips will go to those who worked for it”.
If an employer breaks the proposed law they can be taken to an employment tribunal, where they may be forced to compensate workers or face hefty fines.
It is expected to come into force within the next year.
The new rules, which were first proposed five years ago, are estimated to help the over two million hospitality workers affected.
Research has found that 80 per cent of all tipping in the UK now happens by card rather than money going straight into the pockets of staff.
This helped accelerate shady practices, with a number of businesses issuing customers a discretionary ‘service charge’ with most if not all landing in the hands of bosses.
This proposed legislation will help to stop this and bring more consistency for workers when it comes to receiving tips through cash or card, with legislation forcing employers to pass on these funds to staff fairly without deductions.
A Statutory Code of Practice will be created to set up how tips should be distributed to ensure transparency.
Under the changes, there will be more rights for hospitality employees to request for information relating to an employer’s tipping record, which helps them bring a more credible claim to any future employment tribunal.