Claw Back On Tips Gets Customer Criticism
Article date: 11.11.09
Restaurants are following the letter of the law in implementing new rules on tipping, which are designed to boost wages for waiting staff, but many are ignoring the spirit of the legislation and charging staff an administration charge for tips left on credit cards.
It’s a move that’s earning negative publicity amongst customers for many of the bigger chains, and employment law advisers are reporting concerns amongst smaller local restaurants on how to manage the change.
Under the new legislation, which was introduced in October, any business which passes on tips and service changes to staff has to comply with new rules.
Until recently employers were allowed to treat tips and service charges as part of an employee’s pay for the purposes of the national minimum wage provided they were paid to the employee through the payroll and the amounts were shown separately on the employee’s payslip.
But following a review by the Government, gratuities are no longer allowed to count and employers must ensure that all employees receive current national minimum wage before adding on tips or service charges.
As well as tackling the minimum wage, the Government review also flagged up concerns that the tips and service charges collected are not being distributed to employees in full, and called for greater transparency from employers and for them to demonstrate a fair tipping policy.
Whilst employers generally seem to be up to speed on implementing the legislation, many are interpreting the law as tightly as possible and seeing where they can hold down increased costs.
Should you require any help or advice in this connection please do not hesitate to contact Mr Peter Kirk at our Bournemouth office.
