Hospitality and leisure sector workers are missing out on about £200m in tips every year according to Labour figures, with the party pledging to “stamp out” unfair deductions for good.
Angela Rayner, Labour’s deputy leader, will set out plans this week to ensure employers allocate all tips, gratuities and service charge payments to workers in full, without any deductions apart from statutory taxes, by the end of the following month.
At the Trades Union Congress conference in Brighton, she will also announce proposals to allow exploited workers to lodge any workplace grievances collectively, a right denied to many hospitality workers seeking the return of deducted tips.
The Conservatives promised to tackle the tips issue in their 2019 manifesto and also in an employment bill that was dropped from the last two Queen’s speeches, with Labour estimating that staff may have lost more than £1bn in tips since the government first promised action six years ago.
In the interim period, there have been a number of high-profile examples of workers being denied tips.
A government-backed private member’s bill is making its way through parliament but Labour says it does not close loopholes that allow employers to choose how tips are distributed.
The bill encourages firms to use independent “tronc” systems – a pay arrangement that lets businesses such as bars, restaurants, hotels or casinos fairly share staff tips – but Labour said this should be compulsory for firms with more than 20 employees.
Rayner, who is shadow secretary of state for the future of work, said: “It is disgraceful that time and again this government has allowed hospitality workers to be cheated out of their own money, with staff losing up to £1bn over the past five years of Tory inaction,” she said.
“Not content with crashing the economy, the Tories are showing they are the anti-worker party in every sense. Frontline workers in pubs, bars, cafes and restaurants are often the lowest paid, and with the Tories’ cost of living crisis worsening by the week, every penny counts.”
The Department for Business Energy and Industrial Strategy said: “Sadly too many businesses shamefully fail to pass on service charges from customers to their staff, which is why the employment bill, backed by the government, will ensure that all tips go to staff by making it unlawful to hold back well-earned service charges from employees.
“More than 2 million UK workers will benefit, helping ease pressures caused by increase in the cost of living.”