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Workers will be entitled to keep 100% of their tips under a new law expected to be announced this week.
Business secretary Kwasi Kwarteng is to reveal new legislation that will prevent restaurants and other employers where customers tip workers from keeping the service charge levied when customers pay by card.
Although existing legislation bans organisations from keeping workers’ cash tips, firms can currently choose not to pass on the service charge from card payments. The proposed change in law will mean that they must pass these service charges on to staff.
A government source told the Mail on Sunday: “Workers going above and beyond for their customers can now rest assured that their hard-earned tips will be going directly in their pockets and nobody else’s.
“We’re putting an end to dodgy tipping practices and making sure that hard work pays off. We are also levelling the playing field for businesses, ensuring that good firms which give all the tips to workers are not undercut by the firms which keep the money.”
The new legislation follows a private members’ bill tabled by Conservative MP Dean Russell in June.
Russell said earlier this year: “When we look at the role that many people have when working in bars or restaurants and so on, the tips are often seen as part of the salary in a way – rightly or wrongly.