No More Tip Top-up for Minimum Wage
Recent reports have indicated that a number of employers in the restaurant business have been using tips to top-up employees’ earnings to meet the minimum wage.
With the National Minimum Wage currently set at £5.52, and due to rise to £5.73 on the 1st of October, this has meant that some firms have effectively been paying a base pay rate less than the minimum wage and supplementing pay with service charges.
Currently firms are allowed to follow this practice, but amidst major concerns from employees in the service sectors that rely on tipping, customers and now the government, topping up wages with tips is to be outlawed from next year. Unions in particular have called the practice "an abuse" and Unison have been protesting against the practice for years with their fairtips campaign.
Business Secretary, John Hutton, said the move was to ensure a fair tipping policy, with customers having always expected that their tips would go to staff for the quality of their service.
Derek Simpson of the Unite union said, in words befitting the hospitality industry:
"Waiters and waitresses across the country have been hungry for the tips loophole to be closed and the announcement today will satisfy their appetites, it is great news that unscrupulous employers will no longer be able to use the tips left for staff to subsidise low wages."