Mike O'Brien

Government crackdown on rogue employers who use tips to underpay staff

The Government is to change the rules so that in future tips given in restaurants will go to employees and will have to be paid on top of the minimum wage. Currently, some rogue employers are using staff tips to pay their employees, to get around the minimum wage. This means some hard-working service staff don’t ever receive the tips that customers leave for them.

Mike O’Brien, MP for North Warwickshire and Bedworth, has welcomed the crackdown. He said,

“Many local people work in resturaunts and other places where tips are given.  It’s wrong for some employers to use tips to pay staff wages. Tips are a gift given from a customer to the staff to show appreciation for a good level of service. They are not intended to subsidise employers. Stopping this bad practice from happening will benefit workers who live in North Warwickshire and Bedworth.”

Tough new penalties for employers who underpay their staff have also been introduced as part of Labour’s crackdown on those who try to exploit workers. The penalties which come into force in April could mean unlimited fines for employers who break the rules. They also include a fairer method for dealing with overdue amounts of National Minimum Wage, calculated so workers do not lose out.

The National Minimum Wage was first introduced in April 1999 at £3.60 per hour for those aged 22 and over and £3.00 for 18-21 year olds. These amounts have steadily increased over the last ten years. An increase on 1st October means that the minimum wage is now £5.73 per hour for those aged 22 and over and £4.77 for 18-21 year olds. This rise has been significantly higher than inflation and helped to make the poorest in society better off. In fact, in the West Midlands alone 94,000 people or 3.8 per cent of the workforce will benefit from the increase.

Mike said, “The minimum wage stops employees being exploited. Hard-working employees deserve a fair day’s pay for a fair day’s work.  Thata`s why I supported the new laws and why I want to see tougher action on rogue employers who treat their workforce badly.

“I would encourage local people worried that they may not be getting the full  National Minimum Wage to call the helpline on 0845 6000 678. Callers can remain unnamed if they want to.”

Notes to Editors

1. To find out more about this consultation visit: http://www.berr.gov.uk/consultations/page48902.html