Are Tips illegal???

tedblight

Hi,

My partners work place has gone into Administration, its a Hotel & Restaurant...
Normaly the tips from the restaurant are shared out monthy between all the staff as a bonus.

Since been in Administration, the tips have stopped. The Administrators say that tips are illegal and that they are claming them all for themselfs....

Are they allowed to do this???

Thanks in advance!

alwaysonthego_2

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dacouch

http://www.berr.gov.uk/files/file52948.pdf

Sparhawke

I always understood that tips were an appreciation of the work done by the actual staff, the cooks, waiters and kitchen staff and should be carried out by those actually doing the work, not to be taken by someone at the top so they can buy the bubbly for the Christmas party but it has been some years since I worked in this industry...so don't know whether it has been changed.

Best thing to do in that situation is to probably come up with a plan with all the actual workers to find a way of getting tips themselves and figure out a way to divide without letting administrators get their hands on it.

In the link given above it simply has guidelines which are not set in law, beyond the fact that tips should not be a substitute for actual wages, tips are to be on top as a bonus from the customer to the worker as a perk of good service. They are not to be used to finance admin costs, though if no one questions it companies will get away with it.

Anyways, to cut a long story short, the administrators are telling porkies...tips are not illegal and never have been though there are some questions as to whether they are taxable.

(See page 8 of that link that clearly states that about 70% of all service charges should go to staff, and ALL cash tips should go to the workers)

Further information can be sought at page 10 with a handy telephone number

tedblight

Hi,

That link helps a lot. Thanks.
But it doesn't clear up my main issue which is 'Do the Adminstatiors have a right to keep the tips...'
As the company is not making money and they have to 'claw' back any money coming into the buissness.

Wine_of_the_World

Does it say anything in your partner's contract regarding tips. When I worked as a waitress (not for long) in stated in our contract that tips wold be divided equally buy all waiters / kitchen staff etc. I think if there is something in the contract about where the tips go then the administrators cant just decide to change it.

Also, is there anything on the menu about tipping? Because if its ALL going to the company couldn't that be fraud? I know when I leave a tip I am not intending to overpay but to tip for good service.

DVardysShadow

Staff should ask punters whether the tips are intended for staff or for administrators. That will settle the matter. As a punter, I would only pay a tip to staff.

Any

I think it is very odd for the administrators to take the tips.. unless it is service charge already pre-added to a bill?

I searched on directgov website and others, but it is unclear. It only mentions who sorts out the tax on tips (you if given to you, employer if service charge is part of the bill). I would check your contract of employment and whether there is anything mentioned in it about tips.

Zozo1985

Surely tips aren't illegal or why would all restaurants etc let it happen. In my oppinion the tips aren't the property of the company but the staff therefore the administrators should have no right to take them as they are not the companys.

TEDDYRUKSPIN

Tips are not illegal and not mandatory either. All tips are considered part of the profit made and companies do not have to distribute them back to the people. Strange but true.

Now you know why so many people hate giving tips and ask if they go direct to the person in question.

Bobl

Tips are part of the income of the business, and do not have to be paid out to the staff. A friend of mine owns a hotel and they take out the cost for all breakages/damage each month before giving the rest out to the staff, which by the way is a taxable benefit.

Staff members who take tips from customer and do not give them to the hotel can be sacked for theft.

Not many people understand that, and I am sure most people think they are giving a tip to the person who served them; but then that would be unfair on the Chef's etc.

So in answer to the original question; yes it is right for the administrators to retain the tips. Their job is to pay off all of the creditors before anything else.