Andrew has welcomed the recent announcement that the government has launched a consultation on new plans to bring greater transparency to tipping for workers and consumers.
Andrew has been campaigning on this issue for several years, working with a number of other MPs and organisations, including Unite, and even introduced a Bill in Parliament back in September 2014; which sought to require companies to pass tips to staff in full.
The new plans to end unfair tipping practices and increase transparency for consumers and employees were announced yesterday (2 May 2016) by the Business Secretary, Rt Hon Sajid Javid MP. The announcement follows a call for evidence on the tipping practices in the hospitality, leisure and service industry last year (2015). The consultation closes on the 27th June 2016.
The consultation paper reflects the evidence received from consumer, worker and employer groups, and sets out the government’s proposals for the handling of tips and service charges. They include:
· updating the current voluntary code of practice and putting it on a statutory footing to increase employer compliance
· increasing transparency for consumers to make it clearer that suggested discretionary payments for service are discretionary and that consumers are free to choose
· preventing or limiting any employer deduction from discretionary payments for service, except for those required under tax law
Currently there is no legal requirement for the treatment of discretionary payments for service regarding the proportions that go to employers and workers. The voluntary code of practice was introduced in October 2009 to improve the information available on tips, gratuities, cover and service charges and to increase transparency in this area.
Andrew says, “Most people who leave a tip are expecting that this money will go to the hardworking staff who provide excellent customer service. However, there has been a real disparity in the amount companies have been passing onto their staff, with no legal requirement.
Whilst some employers have been very positive, paying 100% to staff, others have been less than supportive and I have been shocked by some of the examples provided to me by workers. Many who work in the hospitality sector earn either the National Minimum Wage or National Living Wage and these tips can be an important addition to their earnings.
There is broad agreement that the current practices are not clear and I have been pushing for reform of this in Parliament, including introducing a Bill calling for legislation on this issue. I’m delighted that the government has listened to concerns and that these proposals take a serious look at tipping practices."
Business Secretary Sajid Javid comments, “We’ve been very clear. As a one nation government we want workers who earn a tip to be able to keep it. That’s why I, like many others, was disappointed by the tipping practices of some of our well-known chains. This has to change.
Today I’m setting out our proposals to make tipping fairer, clamping down on unfair practices and securing a better deal for the millions of workers in the service industry. We will look closely at all the options, including legislation if necessary.”
Photo - Andrew introducing his Ten Minute Rule Bill in September 2014
