Public Servant Lifestyle

Business Secretary, John Hutton serves up a fair deal on tips anf tipping - for restaurant staff and customers.

Plans have been announced to amend regulations so that tips can no longer count towards payment of the National Minimum Wage, as it celebrates the 10th anniversary the legislation.

The changes will end the practice of employers using gratuities and service charges processed through the payroll to 'top up' staff wages to meet the £5.52 per hour National Minimum Wage, which rises to £5.73 on 1 October.

Business Secretary, John Hutton, also revealed proposals for making tipping practices fairer and emphasised the importance of improving transparency: "Hundreds of thousands of people in the UK have jobs in sectors where tipping is commonplace. When people leave a tip, in a restaurant or elsewhere, they expect it to go to service staff and as consumers, we've got a right to know if that actually happens.

Fairness v. Cynicism

"This is an issue of fairness and common sense and it's one many people clearly care a lot about. Under the current law, all workers are already entitled to receive the minimum wage. The changes we're proposing will mean that in the future, tips cannot count towards payment of the minimum wage.

"We also want to encourage employers to make it clear how tips are distributed so that customers know where their money is going and whether or not the establishment operates a fair tipping policy."

Responding to the announcement - which came from the Department for Business, Enterprise & Regulatory Reform (BERR) - Trades Union Congress (TUC) General Secretary Brendan Barber said: "The Government is right to make sure that workers can keep their tips and that the responsibility to pay the minimum wage rests squarely with employers. Most ordinary people think the current loophole in the law is unfair because it allows unscrupulous employers to cheat workers out of the tips that are meant for them.

"This is a welcome example of the Government responding to the concerns of hard-pressed vulnerable workers."

A consultation on implementing the Government's recommendations will be launched in the autumn. Guidance for both workers and employers will be issued following the consultation to ensure a smooth transition when the regulations are changed, which is anticipated to be 2009.

For more information on the UK's National Minimum Wage visit the HM Revenue website at: www.hmrc.gov.uk/nmw

PSP Ltd is not responsible for the contents of external websites.

More information available in Holidays, Dining Out