Are tips illegal?

I d like to know are tips illegal or not? I found some information about it but couldn’t understand what does it mean?

There are some 165,000 businesses in the hospitality, leisure and service sectors where tipping is common. These sectors are an important part of our economy employing some 1.3 million workers. Restaurants, hotels and bars make up the largest proportion of the sector (about 80%), but tipping is also an important feature in industries such as hairdressing, casinos and private car hire.

From 1st October 2009, service charges, tips, gratuities and cover charges can no longer be used to make up national minimum wage pay. This means that all eligible workers must receive at least national minimum wage in base pay with any tips they receive being paid on top.

All workers must receive the statutory national minimum wage. The Department for Business, Innovation and Skills (BIS) aims to empower consumers through clear information on what happens to the service charge, tip or gratuity they leave. The customer should know what is happening with his/her money and be able to make a judgement on its fairness.

Additional voluntary measures are being introduced through this Code of Best Practice to improve the information available to consumers and workers about service charges, tips, gratuities and cover charges. The Code provides businesses with practical guidance on how to operate in a fair and transparent way and should ensure consumers have sufficient information to make an informed choice before they leave a tip or gratuity or pay a service charge.

The Code applies to all tipping sectors including:

    * hotels and restaurants
    * gambling and betting outlets
    * hairdressing and other beauty therapy businesses
    * taxi operations

This guidance has been developed by trade unions, business representatives and consumer groups to provide a mechanism by which individual businesses can demonstrate their intention to operate a fair tips policy. It has been endorsed by the following organisations who will promote it to their members:

    * Confederation of British Industry (CBI)
    * British Hospitality Association (BHA)
    * GMB
    * Trades Union Congress (TUC)
    * Unite the union

This article sets out the four principles of the Code of Best Practice and provides guidance on ways in which businesses can make information available to consumers and workers. Businesses signing up to the code accept the principles in their entirety.

crown copyright! 2009