The Department for Business, Innovation and Skills (BIS) is proposing to limit employer deductions from discretionary tips and service charges buy updating the current voluntary code of practice and putting it on a statutory footing to increase employer compliance.
At the moment there is no legal requirement for the treatment of discretionary payments for service regarding the proportions that go to employers and workers. A voluntary code of practice was introduced in October 2009 to improve the information available on tips, gratuities, cover and service charges and to increase transparency in this area.
However, following a call for evidence on the tipping practices in the hospitality, leisure and service industry last year, the Government has launched a consultation on its proposals to increase fairness for workers.
The consultation paper also proposes increasing transparency for consumers to make it clearer that suggested discretionary payments for service are indeed discretionary and that consumers are free to choose. It would also like to prevent or limit any employer deduction from discretionary payments for service, except for those required under tax law.
In addition, the Government is considering whether to ban or restrict the levying of table sales charges on staff, which is a fee paid by waiting staff based on their sales during a shift and how to incentivise and increase the prevalence of well-managed tronc (a tip pot that is paid out to all staff) systems.
As Business Secretary Sajid Javid said, it is the Government’s aim to ensure that additional payments for service should be voluntary to the consumer, received in full by workers where appropriate, and transparent to the consumer who makes them.
Interestingly, a recent survey by restaurant booking service OpenTable found that 87 per cent of UK customers always leave a tip and that the average percentage of the bill left is 9 per cent.
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