The government have changed the law meaning people in certain jobs will receive a cash boost.
More than two million people who work across the hospitality, leisure and services sectors, and are often tipped for providing a good job, will now take home more. This will include those who work in bars, restaurants and hotels as well as those who provide services such as beauty salons and taxi driving.
The government backed the new law on Friday, July 15, which would see employers banned from withholding tips from their staff. The Employment (Allocation of Tips) Bill, introduced by Dean Russell MP and backed by the government, will ensure that all tips go to staff by making it unlawful for businesses to hold back well-earned service charges from their employees.
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Despite most hospitality workers – many of whom are earning the National Minimum Wage - relying on tips to top up their pay, there are still sadly too many businesses who shamefully fail to pass on service charges from customers to their staff.
This overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and services sectors – who tend to rely on tips the most – and will help to ease pressures caused by global inflation and an increase to the cost of living. The move towards a cashless society has exacerbated the problem of companies keeping card tip payments for themselves, and today’s measures, once in law, will ban that practice.
Dean Russell, Conservative MP for Watford, said: "I am delighted that my Tips Bill has passed second reading in Parliament. It is fantastic that we are on track to securing a fair deal for millions of people working in hospitality across the country.
"It has always felt wrong that some employers have retained tips intended for their staff. This new legislation will halt this practice, particularly given the current challenges around the cost of living. I would like to thank all of the businesses and stakeholders that have got in touch to voice their support."
Jane Hunt, business minister, said: "At a time when people are feeling the squeeze with rising costs, it is simply not right that employers are withholding tips from their hard-working employees. Whether you are pulling pints or greeting guests, today’s reforms 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."
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