The hospitality industry needs to prepare for a significant change to the national minimum wage, a Coventry solicitor has warned.
From October 1, wages will again rise for all workers – but using tips as part of hourly pay will be outlawed.
Tips, such as those given in restaurants in bars, are “meant as a bonus” and so businesses will no longer be able to raise staff pay with them, the Government has ruled.
Mark Ridley, associate and head of employment at Station Square-based Band Hatton, said: “When announcing this change, Pat McFadden, who is the Minister for Business, Innovation and Skills said that it was not right for employers to use tips meant as a bonus for staff to boost pay levels to the legal minimum.
“This is certainly commendable, but there is a possibility that some businesses may experience an increase in their costs which could force them to shed staff.
“The actual minimum wage rises are modest and have reflected the balance between helping workers in a recession without damaging businesses too much.
“But if restaurants or bars have been operating where a large part of wages is taken from tips, this could be a shock to the system and they need to prepare now.”
From October 1, the changes will see workers aged 22 or over see the minimum hourly rate go from £5.73 to £5.80.
People aged 18 to 21 will go from £4.77 to £4.83, and workers aged 16 to 17 from £3.53 to £3.57.
Ridley added: “If businesses are worried about meeting the legal obligation or aren’t quite sure of their position with tips, then the best thing they can do is to seek legal advice.
“It’s something we have dealt with for years, so any businesses needing a helping hand to make sure they are prepared legally for the changes is welcome to get in touch.”
To contact Mark Ridley, call Band Hatton on 02476 632121.
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