New law to make sure workers get their share of card tips

Employers in the hospitality sector who fail to share tips with their staff  will be breaking the law under new legislation proposed by the government.

The move should help about two million waiting staff and other hospitality workers and came about several high-profile firms were found to be deducting money from card payments intended for waiting and kitchen staff.

Research found many businesses that add a discretionary service charge to customers’ bills were keeping part or all of that cash, instead of passing it to staff.

Some companies even used the money to top up the wages of managers and chefs while others used it to boost profits.

With the pandemic having sped a move towards contactless payments on cards, which now account for 80% of all UK tipping, it became imperative for the government to act as only cash tips are protected by law and keeping card tips was much easier for unscrupulous employers.

‘Reward for good service’

Some chains had also charged workers a processing fee for tips left by credit and debit cards.

Labour markets minister Paul Scully said: “Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.

“Our plans will make this illegal and ensure tips will go to those who worked for it.

“This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it.”

The new laws will force bosses to pass on tips to workers without any such deductions and employees will be able to request tipping records and take employers to a tribunal if they feel tips have been withheld.

The government did not say when the new laws would come in but said they would “form part of a package of measures which will provide further protections around workers’ rights”.

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