Bar & restaurant workers handed tips olive branch
The Employment Appeal Tribunal has ruled in HM Revenue & Customs' favour by supporting current National Minimum Wage legislation relating to tips, in the case of Annabel's restaurant and night club.
The decision is good news for the UK's restaurant and bar workers.
This means that employers have to pay their staff at least the National Minimum Wage regardless of any tips, gratuities, service or cover charges, so long as the tips are not paid directly through the employer's payroll.
HMRC argued that payment via a 'tronc' (an independent tips distribution scheme) does not count towards the National Minimum Wage.
The Judge determined that where restaurant or bar service charges are paid by the customer to the employer, but are then paid into a 'troncmaster's' bank account for distribution in accordance with a 'tronc' scheme agreed between the troncmaster and employees, the sums so distributed to employees are not "paid by the employer" for the purposes of being included in any National Minimum Wage calculation.
Denise Gaston of HM Revenue & Customs said: "Our priority is to ensure that all workers are paid at least the National Minimum Wage. We are very pleased that the court has recognised HMRC's commitment to ensuring that tips are correctly and fairly distributed to the people who earn them. This is good news for bar and restaurant workers across the UK."
A spokesperson for the Department for Business said: "It is essential that all UK workers receive the pay they are entitled to and that everyone earns at least the National Minimum Wage. Equally, it's important that tipping is fair and we are already examining what options are available to help ensure transparency."
Anyone who thinks they are not being paid National Minimum Wage rates should contact the confidential NMW Helpline on 0845 6000 678 and we will ensure the law is complied with.
Words: Clare Riley
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