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New rules crack down on tip top-ups

New rules come into force today to ensure that thousands of workers get a fair deal on tips and wages.

The changes make it illegal for businesses to use tips to bring staff pay up to minimum wage levels.

They come into effect on the same day as new increases to national minimum wage rates, which are set to benefit up to one million people.

Business Secretary Lord Mandelson said: “When I leave a tip I don’t expect it to be used to make up the minimum wage. I want it to go to the person who has served me as a thank you for their service. This is a basic issue of fairness. Tips are meant as a bonus – not a tool to boost pay to the basic minimum.”

In the new rates, workers aged 22 and over get an increase from £5.73 to £5.80 an hour, 18 to 21-year-olds go from £4.77 to £4.83, and 16 and 17-year-olds go up to £3.57 an hour from £3.53.

Lord Mandelson said: “The National Minimum Wage remains one of the most important rights for workers. It has made a real difference to the lives of the UK’s lowest-paid workers. It protects them from exploitation and also creates a level playing field for business, making a huge contribution to the UK’s economic success.”

Derek Simpson, Unite joint general secretary said: “There is now an urgent need for the hospitality industry to be transparent in how they handle the tips and service charge money left for staff.

“Unite is looking to the sector to adhere to the best practice principles and ensure that customers have the information they need to make an informed choice before they leave a tip or service charge.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .