The payment of tips, gratuities, cover and service charges is prevalent in a number of sectors, including hospitality and the restaurant business.
UK employment law provides that payments paid by the employer to the worker representing amounts paid by customers by way of a service charge, tip, gratuity or cover charge cannot be used to make up the national minimum wage.
If an employee’s basic pay is at the national minimum wage level, any tips paid through the employer’s payroll must be paid in addition to the employee’s basic pay.