Tips cannot be used to top up minimum wage

by Christopher Evans

A court of appeal ruling has found that a firm cannot use tips as a way of meeting statutory minimum wage requirements.

The judgement against Annabel's restaurant and night club and in favour of HM Revenue and Customs has found that the company cannot count any tips, gratuities or service charges towards the wage.

It said must be paid separately with anything given to staff by customers being treated as extra, meaning Annabel's must now pay employees £125,000 in back pay.

Those running a business and keen to keep up with their legal requirements in terms of employee rights can be helped with Lawpack's Employment Law Made Easy, written by an employment law solicitor.

Earlier this week the government revealed plans to make the use of tips and gratuities to subsidise the minimum wage illegal from October.

Employment relations minister Pat McFadden said it is "important for employers to have a level playing field on wages".

  • Employment News from Lawpack: Expert employment law advice, template contracts and letters in Lawpack's Employment Law Made Easy.

Published on: May 8, 2009

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