The Government has bowed to pressure from campaigners and will this week outlaw the practice under which restaurants pay staff less than the national minimum wage and make up the rest in tips.
Ministers will use the 10th anniversary of the National Minimum Wage Act on Thursday to announce they will make it illegal for restaurants to deny staff the minimum wage on the grounds that tips or service charges take them over the £5.52p an hour rate, it was reported today.
The move was discussed in private talks with trade unions and Labour grassroots representatives yesterday at Warwick University to draw up ideas for the party's next election manifesto.
It follows a long-running campaign by the Unite union, backed by the Daily Mirror and a more recent campaign launched by The Independent.
John Hutton, the Business Secretary, said: “Customers who leave a tip in a restaurant want it to go to staff – they don't expect it to be used to subsidise owners paying the minimum wage. People see this as a basic issue of fairness.
“I have heard that message loud and clear from Labour Party delegates this weekend. We have decided to change the law so tips received by serving staff must be paid on top of the national minimum wage, not as part of it."
Len McCluskey, Unite assistant general secretary, said: “This is great news for the thousands of hard-working waiting staff in restaurants and cafés across the country.
“We now look forward to government moving swiftly to closing this loophole once and for all and ending this wages swindle by Christmas.”
The move has been opposed by the hospitality industry, which has argued that many workers may lose out as they will lose the current exemption from national insurance contributions on tips.
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By Daniel Thomas
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