Government consultation on tips, gratuities, cover and service charges

Overview

There are some 150,000 businesses in the hospitality, leisure and service sectors where tipping is common. These sectors are an important part of our economy, employing some 2 million workers. Concerns have been raised about employer’s treatment of these additional payments to workers; and the transparency of such practices to both consumers and workers. The Government launched a Call for Evidence on 30^th August 2015 to investigate issues raised.

The Government welcomed all submissions provided during this investigation and has considered wide ranging evidence from consumer, worker and employer groups. This consultation document sets out the Government’s policy objectives with respect to cover charges and discretionary payments for service. We have outlined several proposals aimed at achieving the Government’s objectives and we are seeking views on these.

Why your views matter

This consultation provides both the Government’s response to the Call for Evidence and proposals for further action. Having considered submissions to the investigation, the Government believes that all discretionary payments for service should be subject to 3 policy objectives. They should be:

1. Discretionary – clear to consumers that they are voluntary;
2. received by workers; and
3. clear and transparent to consumers and workers in terms of how the payments are treated.

This consultation seeks stakeholder views towards the proposed options to meet the Government's objectives.

What happens next

The Government will collate and assess the submissions gathered through this exercise. The Government will then publish a summary of consultation responses and the next steps to be taken.