Theresa May has Pledged to Stop High Street Restaurant Chains Deducting Money from Staff Tips

Theresa May has announced planned legislative action aimed at stopping high street chains deducting up to 10% from tips received by their staff.

Theresa May said of the Government’s plans:

We will introduce tough new legislation to ensure that workers get to keep all of their tips – banning employers from making any deductions. It’s another way we are building an economy that works for everyone.”

The current position

The stance restaurants take towards staff tips differs greatly, with some keeping all the tips, some taking a percentage, and some allowing their staff to keep all tips earned. There are also differences as to whether the tips are shared amongst just the servers, or shared amongst all restaurant workers including, for example, chefs.

The position also varies within individual restaurants themselves, depending on whether the tip was left by way of cash or card payment.

Cash tips belong to restaurant staff, legally should either go straight to the individual server or be shared amongst the restaurant staff. Tips received in this way are not considered the property of the business. Card payments, however, are entirely different and in fact belong to the business owner. Business owners are not currently under any legal obligation to pass on tips received in this way, although in practice many businesses do pass this on to staff.

Going forward

It is likely that many will welcome these proposed legislative changes, because diners usually expect their tips to go directly to the people who served them, not the business. It will also give more certainty and security to restaurant workers, who often work for minimum wage and are heavily reliant on tips to boost their income.

We will be keeping an eye on this and will confirm any legislative development to enable clients to update their policies and procedures in line with these.