22/11/2008
Govermnment Minimum Wage Consultation
The Government has published 'Service Charges, Tips, Gratuities, and Cover Charges: A Consultation', whereby it seeks views on how the law should be changed to stop employers using tips or service charges to bring workers' pay up to the level of the national minimum wage (NMW).
The National Minimum Wage Regulations 1999 currently provide that service charges, tips, gratuities and cover charges that are not paid to workers through an employer's payroll do not count towards the NMW. However, when such payments are collected by the employer and paid through the payroll they do count towards discharging the employer's liability to pay the NMW. The Government considers that this creates an unfair advantage to those employers who do use tips to bring wages up to the statutory minimum, and estimates that some 44,800 workers could be affected by the practice. It therefore takes the view that the Regulations should be amended so that no service charges, tips or gratuities will count towards the NMW. The consultation seeks views on how changes to the Regulations to achieve this should be effected, as well as how information on the use of tips can be improved for customers.
Responses to the consultation must be received by 16 February 2009.
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