Employment

Boris Johnson set to scrap plan to let workers keep tips despite admitting minimum wage isn’t enough to live on

The government announced the plans as necessary to help two million people on low incomes.

The government has reportedly shelved plans to make it illegal for restaurants and bars to keep staff tips, despite admitting the measure was needed to top up the incomes of workers on minimum wage. 

When the move was announced in September, the government acknowledged “most hospitality workers – many of whom are earning the national minimum wage or national living wage – rely on tipping to top up their income.”

But the proposal has been dropped from the Queen’s Speech, the FT reports, meaning that it is not on the government’s agenda of policies to be pushed through parliament – despite the commitment having been first made six years ago.  

Announced by business minister Paul Scully, the measures had promised to “tackle shameful tipping practices”, referencing research finding that “many businesses that add a discretionary service charge onto customer’s bills are keeping part or all of these service charges, instead of passing them onto staff.”

By saying it would make it illegal for businesses to withhold tips from staff, the government promised to give a “financial boost” to two million people.

“Every year this government promises action to ensure fair tipping – and then does precisely nothing to deliver on that promise,” said Sharon Graham, Unite general secretary responding to the news. 

“A hospitality worker can lose thousands of pounds a year from their earnings when the employer refuses to hand over their tips. In a sector notorious for long hours and low wages, tipping misappropriation is another abuse.”

Moves towards a cashless society, which were sped up by the pandemic, have made it easier for restaurants to make their own decisions on what to do with tips paid by customers on card. Some restaurants choose to split tips with all employees of a restaurant, while others give a greater proportion of the tips to more senior employees. 

“Notwithstanding that this remains speculation ahead of the Queen’s Speech, UKHospitality fully supports fair tipping for staff, and recognises how important it is that there’s complete transparency when it comes to tips, tipping practices, and the fair distribution of them among workers. Indeed, our industry has acted of its own accord to make tipping clearer and fairer, including working closely with unions,” said chief executive of UKHospitality, Kate Nicholls.

As the cost of living crisis hits those on low incomes hardest, Unions have urged chancellor Rishi Sunak to increase the national minimum wage. The 6.6 per cent increase announcement back in October 2021 isn’t enough to keep up with the rising inflation, last reported as hitting seven per cent on the Consumer Price Index. 

The national living wage for people aged 23 and above rose from £8.91 to £9.50 on April 1. But The Living Wage Foundation calculated in November 2021 that the minimum amount a person needs to afford to live is £9.90 across the UK and £11.05 in London.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “Workers should absolutely get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service.”

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