BIS Consults on Tackling Unfair Tipping Practices

BIS is seeking views on proposals for further action to end unfair tipping practices. Its objectives are to make it clear to customers that payments are discretionary, to ensure workers receive a fair share of payments and to ensure there is transparency for both workers and customers in terms of how payments are treated.

Making it clear that payments are discretionary

The consultation asks for views on ways to ensure businesses make clear that discretionary payments are voluntary for the consumer, on whether businesses should be prohibited from suggesting a particular amount for service and considers the need for increased transparency regarding cover charges (compulsory payments in additional to payment for the core service and which do not benefit the worker).

Ensuring workers receive a fair share

The Government considers that all discretionary payments for service should be received by the worker or managed separately from the employer through a tronc system. Proposals include:

• Prohibiting employers from charging an administrative fee or making any other deductions, other than those required by the tax system or placing a limit on the amount of deductions an employer can make;
• Banning or restricting the levying of table sales charges on staff; and
• Updating tronc guidance or placing tronc requirements on a statutory footing.

Increasing transparency

The consultation proposes to update the voluntary Code of Practice to require employers to maintain readily available written policies for workers, to give guidance on information to be provided to consumers and to clarify that discretionary payments do not contribute to the National Minimum Wage or National Living Wage. The consultation also proposes to place the voluntary Code of Practice on a statutory basis.

The Consultation on tipping, gratuities, cover and service charges closes on 27 June 2016.