In April 2016, the minimum wage for workers aged 25 or over will increase by 50p to £7.20 an hour. This is the first step in a planned increase to £9 an hour in 2020, under the government’s plans for a new “national living wage”.
For some businesses this will not be a problem, and we have already seen some large retailers commit to paying enhanced rates for their staff.
However, many businesses – particularly hospitality businesses – haven’t realised the impact this will have on their business.
This comes at the same time as a challenge to traditional methods of handling tips and gratuities. Customers and the government are demanding greater transparency in handling tips, but many operators don’t realise that tips can’t count towards the minimum wage.
How can the industry handle this?
One prominent restaurant chain in New York has announced that it is going to remove tipping altogether and instead increase prices and use that extra revenue to increase basic pay for staff. Whilst this is not as a result of the national living wage in the UK, it shows that the markets can change and adapt and there is a possibility that this is the kind of solution the hospitality industry in the UK needs.
We’ve got it covered, so for more information and for specific advice please contact Helen Goss or Darren Smith of our Leisure & Hospitality team on 0118 952 7254 or email us on leisure&[email protected], and follow us on twitter @BTLeisureHosp.
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.