Tips to be cut from Minimum Wage calculations

Business Secretary, John Hutton, has today announced that the government will amend regulations to ensure that tips can no longer count towards payment of the national minimum wage. Currently employers are able to use gratuities processed through payroll to top up staff wages to meet the minimum wage criteria which rises to £5.73 in October this year.

Commenting on the move, John Hutton said:

Hundreds of thousands of people in the UK have jobs in sectors where tipping is commonplace. When people leave a tip, in a restaurant or elsewhere, they expect it to go to service staff and as consumers, we’ve got a right to know if that actually happens.

Making the whole process transparent has to be a good thing.  Employees should receive the full benefit of tips and any good employer is going to recognise the positive impact this will have on motivation.

The governement will put out a consultation paper on its proposals in the Autumn.  Look out for this announcement again then!

But seriously, a shame that despite the pressure the minimum wage has put on some sectors, this issue has had to require legislation.