PRESS RELEASE
Issued by:
Councillor Stuart Kelly,
Cabinet Member for Community and
Customer Engagement
Date of Issue: July 31st 2008
Contact number: 07940 545003

‘FAIR TIPS': LIB DEMS WELCOME GOVERNMENT SUPPORT

Liberal Democrats today welcomed the Government's agreement to changes in the law to ensure ‘Fair Tips' following unanimous backing for their call to support the Fair Tips Campaign at Wirral's Full Council meeting on July 14.

Councillor Stuart Kelly, Liberal Democrat Cabinet Member for Community and Customer Engagement, who led the Council call for the Campaign said,

“I was delighted with the Council's wholehearted support on July 14 for the Fair Tips Campaign, so I naturally welcome today's Government announcement that will stop employers using tips and service charges to top up workers' earnings.

“I now look forward to seeing Wirral's many hospitality industry workers benefit from the axing of this unfair legal loophole.”

The loophole, buried in the National Minimum Wage Regulations 1999, says that if tips are paid through the payroll, they will count towards the minimum wage.

Councillor Kelly continued,

“So well buried is this regulation that the Chair of the Low Pay Commission didn't know it existed.

“We give tips to show our appreciation of good service - not to benefit employers. The law should ensure that what we give to staff is paid to them on top of the minimum wage, not as a subsidy for it.”
Government regulations are not set to change until next year, but in the meantime employers in Wirral will have to comply with ‘Fair Tips' if they wish to appear on the Council's website.

Councillor Kelly's motion includes a ‘Fair Tips' pledge as a condition for inclusion on the ‘Visit Wirral' website and other Council fair trade initiatives.

“Local employers who don't comply will not appear,” said Councillor Kelly.

Councillor Kelly's motion follows below:

See also:

Independent 15 July 2008 pp 1 & 2 ‘Revealed: how the restaurant chains pocket your tips'

Liberal Democrat Group: Notice of Motion - Full Council July 14 2008

Fair Tips Charter

That this Council welcomes the launch of the Fair Tips Charter Campaign.

Council recognises there are honourable owners of hotels, restaurants, and other hospitality outlets who ensure that all gratuities are paid to their staff in addition to at least the minimum wage without deductions.

Council notes that HM Revenue and Customs class service charges, cover charges, gratuities and tips all as gratuities for national insurance contributions purposes.

Council expresses its concern that many hospitality establishments still treat these as extra payments to the proprietors and do not pass them on to their staff in addition to at least the minimum wage.

Council understands that this practice is legally allowed at the moment because of regulation 31 subsection 1(e) governing the Minimum Wage Act 1998.

Council calls on all owners of hotels, restaurants, and other hospitality outlets within Wirral to support the four pledges in the Fair Tips Charter:

  • Pay all employees at least the minimum wage with 100% of tips added on top as a bonus with no hidden charges.
  • Reach agreement on how tips are shared with those staff directly affected.
  • Make no deductions from tips to cover breakages, till shortages or customer walk-outs.
  • Make all rules for the distribution of tips and service charges available in writing for staff and customers on request

Council requests that adherence to the charter a condition of inclusion on the ‘Visit Wirral' website and other Council fair trade initiatives.

Council urges the Government to introduce an amendment that will ensure that all tips will be paid to staff in addition to the minimum wage.

Council calls upon Wirral MP's to sign EDM1567 on this subject.

Moved by: Councillor St uart Kelly
Seconded by: Councillor Alan Taylor