National law firm Shoosmiths has warned employers that they will shortly no longer be able to use tips given to staff to discharge the obligation to pay the national minimum wage.
Birmingham-based partner and employment law specialist Rebecca Sawbridge said: “All workers are entitled to receive the minimum wage but a loophole in the existing legislation means employers can top up staff wages with tips and service charges left by customers and this is currently entirely legal.
“However, following a public outcry, the Government has announced it will be launching a consultation document in the autumn considering how to change the legislation so that in future tips cannot count towards payment of the minimum wage.
“These changes are expected to come into effect in 2009, and will close the existing loophole to all employers, not just those in the restaurant trade.”
The minimum wage for adults aged 22 and over will increase to £5.73 an hour in October, whilst the rate for 18 to 21-year-olds will rise from £4.60 to £4.77. The figure for 16 and 17-year-olds will go up from £3.40 to £3.53.