Restaurants banned from taking cut of tips

THERESA May will today pledge a new law to ban restaurants from taking a cut of staff tips.

A string of restaurant chains have been exposed for taking deductions from tips left by customers and two years ago ministers pledged to take action.

The Prime Minister will say: ‘The unemployment rate under this government is now the lowest since the 1970s – but we want to ensure that everyone is treated fairly in the workplace.

‘That’s why we will introduce tough new legislation to ensure that workers get to keep all of their tips – banning employers from making any deductions.’

Coffee shop chain Le Pain Quotidien was criticised for stopping paid breaks and for failing to pass on all staff tips following the increase in the minimum wage. Pizza chain Zizzi was accused of slashing staff perks, including the amount of tips paid out. While Cote brasserie chain was accused of using automatic service charges to subsidise its waiters’ wages.

Other firms were taking ten per cent of the service charge if diners paid by card or were failing to make it clear that they did not have to pay a service charge or that tips did not go to staff.

Currently, there is a voluntary code of practice, introduced in 2009, to improve the information available on tips, gratuities, cover and service charges.

A new law will be introduced ‘as soon as Parliamentary time allows’, suggesting it will not come into force until next year.