Government to close tip loophole

Using tips to bring staff pay up to minimum wage levels will be made illegal from October, it has been announced.

The Department for Business Enterprise and Regulatory Reform has revealed it is closing the loophole that allows employers to top up staff wages with tips.

Employment relations minister Pat McFadden said when people leave a tip they have the right to know it will not be used towards the minimum wage and it important for employers to "have a level playing field on wages".

He said: "This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum."

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During the consultation process a wide number of business groups supported this change.

The adult National Minimum Wage is currently £5.73 an hour.