Consultation on tips, gratuities, and cover and service charges

Close date: 27 June 2016

The Government consults on how the law should be changed to improve the treatment and transparency of discretionary payments for service. It invites views on its proposed changes to:

  • either update the current voluntary code of best practice on service charges, tips, gratuities and cover charges or put it on a statutory footing to increase employer compliance;
  • make it clearer that suggested payments for service are discretionary to ensure transparency for workers and consumers; and
  • prevent or limit any employer deduction from discretionary payments for service, such as administrative charges for processing payments, except for those required for tax purposes.

The consultation also asks how well-managed tronc schemes can be encouraged to allocate tips in a way that is agreed by staff and how to prevent or limit the practice of additional charges on staff related to sales levels.
Consultation document: Tips, gratuities, cover and service charges: proposals for further action