firm news

Government proposal to end deductions from tips
18 December 2018

The government, in the biggest reform of employment law for 20 years, has published plans to implement a number of proposals following the Matthew Taylor Good Work Review.

One proposal which will affect the leisure and hospitality industry relates to tips, gratuities and service charges which can be a significant part of staff income and are used by customers to recognise and reward good service. 

Whilst most employers pass on all tips to their staff, there are a small minority who do not. Examples of where tips may be held back include to cover administration charges where tips are given by credit card, to cover any shortage in till takings due to a mistake, to cover breakages and one famous restaurant chain even used part of the tips to top up kitchen staff income rather than giving them a pay rise. These have all been controversial talking points in the leisure and hospitality industry for a long time.  

Under the proposals the government has stated it will legislate to ban all employers from retaining or making any deductions to staff tips. The objectives of the proposal are to give customers reassurance that the money they leave in good faith to reward good service is going to the intended recipient, to create a better deal for workers and a level playing field for employers.

The government has not indicated any timescale or said when the proposed legislation affecting tips will come into force.

For full details of the “Good Work” plan please click here.

For more information about how the new reforms could impact on your business contact our Leisure and Hospitality team by email at leisure&[email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

award winning law firm

Boyes Turner are proud to have received the following awards and recognition.