Government to “clamp down” on service charges and tipping practices

Businesses in the restaurant and leisure sectors could be about to face a shake up with business secretary Sajid Javid having unveiled a new consultation into unfair tipping practices.

Following a call for evidence on tipping practices in the hospitality, leisure and service industry last year, the government has laid out a number of proposals for handling of tips and service charges to secure a fairer deal for workers and consumers.

These proposals include increasing employer compliance by changing from a voluntary to a statutory code of practice; increasing transparency for consumers by making it clearer that they are free to choose whether to leave a tip or not; and preventing or limiting employer deduction from discretionary service charge – except for those required under tax law.

Additionally, the government is considering whether to ban or restrict fees paid by waiting staff based on their table sales during a shift.

On the consultation, Javid commented: “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.”

The consultation closes on June 27, to share your views on the issue click here.