DEMAND AN END TO POVERTY THIS GENERAL ELECTION
TAKE ACTION
Employment

Keeping tips from staff is now illegal - here's what you need to know

The government has admitted that the minimum wage isn’t, alone, enough to live on. So they’ve made it illegal to withhold tips from hospitality staff

Customer tipping staff in a restaurant

The government has admitted that many hospitality workers rely on tips to get by. Image: Nguyen Dang Hoang Nhu / Unsplash

When you add a tip for staff onto your meal in a restaurant, do you know who that money really goes to?

While you might assume it’s gone into the pocket of your server, what about the chef? Does the washer-upper get a cut? And if we’re all being included here, maybe the CEO could skim a little cream off the top? 

Moves towards a cashless society, sped up by the pandemic, have made it easier for bosses to either keep waiting staffs’ tips paid by card, or make their own decisions on how to share the service charge out within the company. 

Pizza Express faced backlash from waiting staff in May 2021 after they announced a slice of their tips would be cut to increase the pay of kitchen workers in the high street pizza restaurants. 

Waiting staff saw their earnings nosedive, as their share of tips paid via credit and debit cards or the company’s app was suddenly reduced from 70 to 50 per cent, reported The Guardian.

But a new – long-awaited – law to make withholding tips from staff unlawful has been passed, protecting the tips of more than two million workers from greedy bosses. 

Your support changes lives. Find out how you can help us help more people by signing up for a subscription

“Whether you are pulling pints or delivering a pizza, this new law will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it,” said business and trade minister Kevin Hollinrake.

The Tipping Bill has been on a bumpy ride to be passed, having been first introduced in September 2021, only to be threatened with the bin when it was dropped from the Queen’s Speech in May 2022 under then prime minister Boris Johnson. 

Yet in the same breath as announcing the new plans, The Department for Business and Trade acknowledged that “many hospitality workers rely on tips to top up their pay”, seeming to acknowledge that for those earning the national minimum wage or national living wage, that hourly rate isn’t enough to live on.

With more than half of gig economy workers earning less than minimum wage, according to new research led by the University of Bristol, it’s no wonder tips are heavily relied on to get by. 

Here’s what you need to know if tips help to top up your income, or if you’re a tipper wanting to know where your money is going.

What is the new law on staff tips?

The law, which is expected to come into force in 2024, will create a code of practice to “provide businesses and staff with advice on how tips should be distributed” the government wrote in a statement.

Workers will also have the right to request more information from their employer on where tips are going, meaning they will be able to bring forward a credible claim to an employment tribunal if the numbers aren’t adding up. 

Get the latest news and insight into how the Big Issue magazine is made by signing up for the Inside Big Issue newsletter

However, Bryan Simpson at Unite Hospitality warned that employers could still try to flout the rules, and taking a claim to an employment tribunal can be a lengthy process. 

“Like all statutory rights, from the Health and Safety at Work Act to national minimum wage, just because it’s the law, doesn’t mean that every employer adheres to it. Every week, we support workers who are denied safe conditions in the workplace or paid less than the minimum wage.”

“So the notion that they will have to pursue a hostile employer for a year to get what they’re owed is of no use to workers whatsoever.”

What it means for tippers

The new law should reassure customers that their tips legally belong to the staff that served them.

“It was never right that a minority of companies could pocket tips when the public wanted them to go to the person who served them or made their food,” said Virginia Crosbie, Conservative MP for Ynys Môn.

“The law will now boost wages for what are often lower paid jobs and not boost company profits at the expense of hard-working staff.”

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
Why the four-day working week is a feminist issue – and what we need to do about it
Four-day working week

Why the four-day working week is a feminist issue – and what we need to do about it

This vegan restaurant offers workers with learning disabilities a pathway to independence
Learning disability week 2024

This vegan restaurant offers workers with learning disabilities a pathway to independence

Free bus travel could lift young people out of poverty and unpick cost of living crisis. Here's how
A bus on Manchester’s new Bee Network
General election 2024

Free bus travel could lift young people out of poverty and unpick cost of living crisis. Here's how

Rishi Sunak says people on benefits don't want to work – here's why that's 'wrong and harmful'
dwp protest
Benefits

Rishi Sunak says people on benefits don't want to work – here's why that's 'wrong and harmful'

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know