New legislation banning restaurant bosses from deducting or keeping employee tips is set to come into force, Theresa May has announced.
Speaking at the Conservative Conference today (1 October), the prime minister named high street chains Prezzo, Strada and Zizzi as some of the worst offending restaurants for taking staff tips. The named chains have been known to take an 8-10% cut of tips from its workers.
A consultation into tips, troncs and service charges was launched by business secretary Savid Javid in 2016 and the government has since been accused of “dragging its feet” on making progress with the review.
May said: “We want to ensure that everyone is treated fairly in the workplace. That’s why we will introduce tough new legislation to ensure that workers get to keep all of their tips – banning employers from making any deductions. It’s another way we are building an economy that works for everyone.”
Trade body UKHospitality has said the new legislation will cause unnecessary burden to hospitality businesses, especially those who have taken voluntary action to “ensure fair practice”. The association has provided its members with a code of practice, approved by Unite, which promotes the fair distribution of tips among staff.
UKHospitality CEO Kate Nicholls said: “The hospitality sector took immediate voluntary action to improve transparency and address concerns around the treatment of tips when the issue was first raised. UKHospitality and Unite have developed an industry Code of Practice which deals with the fair distribution of tips among all staff, not just waiters. As a result, best practice has been widely promoted across the sector.
“Some smaller businesses may retain a small proportion of tips to cover the costs of credit card charges and processing payments – but this is a small amount and the practice has been approved by Unite.”
She added: “At a time when costs are mounting for operators in the sector, the government must be careful about introducing additional legislation. There is no evidence that further legislation, which may have unforeseen consequences for staff, is necessary at this time.”