Workers in bars, restaurants and other customer-facing industries will be entitled to 100% of their tips under new proposals that have been put to the government.
Several pledges have been made in recent years to stop employers taking a share of money left for staff, although legislative action has failed to materialise before now.
A new Tips Bill, which has been brought forward by Conservative MP Dean Russell, would prohibit employers from retaining tips intended for staff – many of whom are often on the minimum wage - and ensure group tips are divided between workers.
Mr Russell, MP for Watford, said: "The idea of the Bill, if I can get it through, is to make it so that effectively tips are protected for the people they're given to, and businesses can't assume they've got a right to decide what that tip is for."
Russell said part of the hospitality sector’s post-pandemic reform should include helping staff via a tips guarantee.
Mr Russell added: "I think for most people, when they do leave a tip for someone, they've left it for that person or for the staff, not for businesses to take an extra chunk of it."
Are restaurants allowed to dip into tips?
Right now, there are no specific laws in place to protect workers from having some or all of their tips taken away. The guidelines are also vague on who gets to keep it.
However, there is a law in place to stop bosses using it to make up the minimum wage - any tips paid to workers must be on top of their basic pay.
There's also a Code of Best Practice on employers keeping tips, however the rules are voluntary so employers don't have to abide by it.
It states that where tips are pooled, it is possible for your employer to keep some of the money back, say for example to account for money missing from the till. This practice is entirely legal as tips are not classed as wages and thus in legal terms this will not be an unlawful deduction from wages.
It's also worth noting that tips added to a credit card payment become the property of the employer so whether they pass it on is often discretionary.
As best practice, employers are obliged to make clear to workers how any tips will be paid, distributed, whether cash and card payments are treated differently, any deductions that will be made and what will happen when workers are on leave.
