Consultation outcome

Tips, gratuities, cover and service charges: proposals for further action

• From: Department for Business, Energy & Industrial Strategy
• Published: 2 May 2016
• Last updated: 24 September 2021 — See all updates

This was published under the 2015 to 2016 Cameron Conservative government

This consultation has concluded

Read the full outcome

Tipping, gratuities, cover and service charges consultation: government response

PDF, 163 KB, 13 pages

Detail of outcome

The government believes that all tips should be:

• discretionary, and clear to consumers that they are voluntary
• received by workers
• clear and transparent to consumers and workers in terms of how the payments are treated

The consultation responses show that the current guidance and rules are not sufficient to achieve the government’s objectives. Based on this, government announced in 2018 the intention to legislate to ensure tips left for workers go to them in full, ensuring they get the tips they deserve and giving customers reassurance.

We will bring forward measures to ensure tips, gratuities and service charges go to workers in full as part of an upcoming Employment Bill. These will require employers to pass tips on to workers in full without making any deductions. Employers will also be required to distribute tips in a way that is fair and transparent, including via tronc systems if they wish, and they must have a written policy on tips, and a record of how tips have been dealt with.

This legislation will be supported by a statutory Code of Practice on Tipping. There will be provisions to allow workers to request information relating to an employer’s tipping records and, where employers fail to comply with these measures, this will be enabled through Employment Tribunal.

Detail of feedback received

We received 173 responses to this consultation:

• the majority (126, or 73%) were from customers of businesses where tipping takes place
• the remainder were employers of businesses where tips or gratuities were made, workers who receive or collect tips, or other respondent groups

Feedback strongly supported:

• transparency for consumers on discretionary payments and that they are to be freely given
• the government’s objective that workers receive their fair share of discretionary payments. Almost 70% of respondents favoured preventing any employer deductions from discretionary payments
• a statutory code of practice – by a majority (61%)

Some respondents opposed the proposals. They believed the existing regulatory framework was sufficient and that employers would face increased costs from complying with the proposed reforms.

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Original consultation

Summary

We're seeking your views on proposals to ensure the treatment of tips, gratuities, cover and service charges is fair and transparent.

This consultation ran from
12:15am on 2 May 2016 to 11:45pm on 27 June 2016

Consultation description

We believe that all discretionary payments for service should be subject to 3 broad policy objectives:

• clear to consumers that they are voluntary
• received by workers
• clear and transparent to consumers and workers in terms of how the payments are treated

The consultation document includes:

• the government’s response to the call for evidence
• proposals for further action

We’re seeking views on our proposals for further action.

Documents

Tips, gratuities, cover and service charges: consultation document

Ref: BIS/16/172

PDF, 272 KB, 37 pages

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Published 2 May 2016
Last updated 24 September 2021 + show all updates

1. 24 September 2021

   Government response published.

2. 2 May 2016

   First published.