Restaurant staff 'should keep their tips'
Waiting staff should receive their tips in full and it should be clearer to customers that gratuities are optional, the business secretary has said.
Sajid Javid said a tip had to "go to the people you intended it to go to" and announced proposals to stop or limit employer deductions from tips.
It follows claims that some restaurant chains were regularly holding back some or all of the tips meant for staff.
The Unite union said it was a "victory" for staff but should be backed in law.
Currently, there is no legal requirement for firms to hand over gratuities to their waiting staff.
There are almost 150,000 hotels, pubs and restaurants in Britain, employing about two million people.
Announcing a two-month consultation on proposals that the government said would stamp out unfairness, Mr Javid told the BBC: "Too many people were finding that when they were leaving tips for hardworking people they weren't actually going to those people.
"That's unacceptable. It's got to go to the people you intended it to go to, it's got to be a transparent process, it's also got to be voluntary for good service."
The proposals include:
- making it clearer for customers that tips are optional
- preventing or limiting any employer deduction from tips except for those required under tax law
- and updating the existing voluntary code of practice from the government and putting it on a statutory footing to increase employer compliance
Mr Javid said the government would also look at legislation "if necessary".
Unite had been campaigning for action after complaining that some firms were counting tips as part of a worker's pay.
Dave Turnbull, Unite's officer for the hospitality sector, said any change would need backing in law to make it effective.
"Restaurant staff and hotel staff and back-of-house staff should be paid a living wage," he told BBC Radio 5 Live.
"They're highly skilled people, they've got a lot of customer service skills and it shouldn't be a situation where restaurant owners and large corporate companies take it for granted that customers are going to subsidise low pay."
But Mr Turnbull said the proposals were a "massive victory for all those waiting staff who have worked tirelessly to expose sharp practices in the hospitality industry".
"All they want is what any worker wants - to take home what they have earned, no corners cut," he said.
The British Hospitality Association (BHA), which represents more than 40,000 establishments in the UK, said it would meet with hospitality business leaders across the UK and conduct its own impact assessment.
BHA chief executive Ufi Ibrahim told BBC Radio 4's Today programme: "Empower the customer to know exactly what happens to tips should they choose to leave them.
"Ensure that they know they don't have to leave a service charge, that they could opt to leave a cash tip if they wish to.
"And let them know where that money is going. But what we need to do I think is to ensure that transparency is compulsory."
Food critic Jay Rayner told the BBC that the system of service charges and tipping "has outlived its usefulness". He believes tipping should be scrapped, with waiters receiving a rise in their basic wage instead.
"It's a bizarre system that we have and it only applies in restaurants, pretty much," he said.
Last year, restaurant chain Pizza Express announced it would stop deducting an 8% administration fee from staff tips made by card following pressure from unions and staff.
The firm, which uses a "tronc" system where tips are collected together and distributed evenly through the staff, said tips made by card would be "fully distributed" among employees.
Restaurant chain Giraffe scrapped its 10% admin fee on tips last year, joining the Restaurant Group, Carluccio's, Garfunkel's and Jamie Oliver's which do not deduct a fee.
The consultation period runs until 27 June 2016.