Further consultation on tips, gratuities, cover and service charges

03 May 2016

Further to the call for evidence on tips, gratuities, cover and service charges, the Department for Business, Innovation & Skills (BIS) has published a consultation seeking views on proposals for further action.

Background

In August 2015 the Department for Business, Innovation & Skills (BIS) published a call for evidence on tips, gratuities, cover and service charges.

The call for evidence initially focused on the hospitality sector. BIS also received evidence from other sectors where the payment of tips, gratuities, cover and service charges is commonplace, including gambling, betting, hairdressing and taxi operators.

The CIPP surveyed members and what was apparent from the responses was the low awareness of the Voluntary Code of Practice for payroll practitioners and low visibility for customers on premises where tips and gratuities are administered. There also appears to be a lack of trust in businesses to pass on the full entitlement of tips and gratuities to workers.

 

Next steps

BIS has reported that their analysis of the call for evidence submissions showed that there is broad agreement that intervention is required to improve the treatment and transparency of these payments.

So BIS has now published a consultation based around three broad policy objectives that they believe all discretionary payments for service should be subject to; they should be:

  • 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.

 

CIPP comment

The Policy Team will naturally be dissecting the consultation and asking members and the payroll profession for their input so please do watch out for a survey on this subject in the coming weeks.

The consultation runs from 2 May 2016 to 27 June 2016.