New laws will ‘stop bars and restaurants from keeping tips meant for staff’

Bars and restaurants will be banned from keeping tips intended for staff members under new laws, according to reports today.

While tipping waiters and bartenders may seem like the generous thing to do, it is a sad reality that many hospitality employers pocket a percentage of staff tips paid on card without the customer’s knowledge, despite certain staff members relying on these tips to make a reasonable living.

This kind of behaviour is rife at a number of establishments across not only Manchester, but the whole country, thanks to no specific regulations around service in the UK being in place – although cash tips handed to a server directly will legally be theirs. 

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But this week, Business Secretary Kwasi Kwarteng is expected to announce plans to ensure pub, restaurant and cafe workers are entitled to 100% of the tips they receive through card payments.

A Whitehall source told the Mail on Sunday: “Workers going above and beyond for their customers can now rest assured that their hard-earned tips will be going directly in their pockets and nobody else’s.

“We’re putting an end to dodgy tipping practices and making sure that hard work pays off.

“We are also levelling the playing field for businesses, ensuring that good firms which give all the tips to workers are not undercut by the firms which keep the money.”

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However, the new laws are likely to hit businesses with additional administrative costs, meaning food and drink bills may rise as a result.

This comes just months after a brand new Tips Bill was brought forward by Conservative MP Dean Russell in a bid to make progress on the issue and put protections in law. Russell told the PA news agency: “When we look at the role that many people have when working in bars or restaurants and so on, the tips are often seen as part of the salary in a way – rightly or wrongly.

“It’s always felt wrong to me that businesses can take the tips that have been given by the customer directly to that individual or to the staff for businesses to go ‘Well, actually, that’s part of the payment for what they’re getting.’”