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Government Consults on the Handling of Tips and Service Charges

Following a call for evidence last autumn on the operation of tips, gratuities, cover and service charges, the Government concluded that intervention was required to improve the treatment and transparency of these payments.

To that end, a further consultation has now been published seeking views on how the Government’s objectives in this regard can be achieved.

The proposals include:

  • updating the current voluntary code of practice and putting it on a statutory footing to increase employer compliance;
  • making it clearer that suggested discretionary payments for service are discretionary and that consumers are free to choose; and
  • preventing or limiting any employer deduction from discretionary payments for service, except for those required under tax law.

In addition, the Government is considering:

  • whether to ban or restrict the levying of table sales charges on staff – a fee paid by waiting staff based on their sales during a shift; and
  • how to incentivise and increase the prevalence of well managed tronc systems.

The consultation document can be found here. The closing date for responses is 27 June 2016.