Employment law
News: Tips will no longer count towards the National Minimum Wage
- Date: 01/08/2008
- Author/Solicitor: Nick Arron
It is the 10th anniversary of the National Minimum Wage so it's timely for the Government to announce plans to amend regulations so that tips can no longer count towards payment of the National Minimum Wage (NMW). Consultation will be launched in the autumn with a broad target of 2009 for implementation. Helpfully, guidance for both workers and employers will be issued. We will keep you updated of developments.
Currently, where tips and gratuities are given directly to workers by customers and are retained by the workers without any other party being involved, they cannot count towards NMW payment. Where there is evidence that cover charges, service charges, tips and/or gratuities are paid by the employer to the worker via the payroll then the tip can count towards national minimum wage pay.
NMW for adult workers will increase from £5.52 to £5.73 from October 2008, with the rate for 18-21 year olds increasing from £4.40 to £4.77 and the rate for 16 and 17 year olds going up from £3.40 to £3.53.
For more information please contact Nick Arron