The Government has announced proposals for new legislation, which would make it a legal requirement for employers to pass on all tips to workers in full.
The move would be expected to benefit over a million workers, many of them low-paid.
In some sectors, tips, gratuities and service charges make up a significant share of employees’ income.
However, previous analysis has found that around two-thirds of employers in the hospitality sector were making deductions from staff tips, in some cases taking as much as 10 per cent.
The new legislation would come via the Employment (Allocation of Tips) Bill, which would see bosses have to pass on all tips to workers in full, and in circumstances where bosses distribute tips amongst employees, they must do so fairly and transparently.
The bill will see the creation of a new Code of Conduct to guide employers through the process ensuring that employees are treated fairly and in line with the rules.
If voted on and passed, the bill will apply to England, Wales and Scotland.
The action is the long-awaited outcome of a Government investigation into the issue, which found that several large restaurant chains were taking staff tips and using them to top up the wages of workers who were being paid less than the minimum wage.
Unite’s Officer for Hospitality Dave Turnbull, said: “Whether the government’s promise of a ‘fair tips’ bill amounts to the Michelin-starred changes that hospitality staff have been waiting years for, or is yet another dish served cold, is open to question.
“As ever the devil will be in the detail. Unite will be scrutinising the bill to ensure it represents the actions needed to stop greedy bosses pocketing people’s hard-earned tips.”
Samantha Randall, an Employment Law expert with Palmers, said: “The proposed changes to the laws will benefit more than a million workers who rely on tips to boost their income.
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