dataplan payroll services

Minimum wage to exclude tips

Minimum wage to exclude tips
Friday, 08 May 2009 23:00

With effect from October it will no longer be legal to use the practice of making workers pay up to the minimum wage through the use of tips.

Subject of a great deal of recent debate and a consultation by the government on the use of cover charges, service charges and tips.

The present legislation works by allowing an employer to use the value of any tips to increase the value of existing pay to the national minimum wage, as long as they are processed through an employees payroll.

Employment relations minister commented "when people leave a tip for staff, in a restaurant or anywhere else, they have a right to know that it will not be added to make up the minimum wage. Our consultation showed a wide support for these changes, including from business groups, and we are working with them to ensure that consumers get the information they need."

There is also support from the givernment for developing a code of practice for the industry to provide further transparency for consumers.

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