The Government’s Tips U-Turn Is a Betrayal of Low-Paid Workers

The government's broken promise to ensure staff can keep their tips is a betrayal of low-paid workers – and a green light for bosses to continue theft and exploitation in the workplace.

Another day, another broken promise to working people. Despite the government’s announcement last year that it would make it illegal for bosses in bars and restaurants to keep their staff’s tips, plans to help low-paid hospitality staff have been binned.

The government has been promising to enshrine protection of tips in law since 2019 after running an investigation into the issue four years earlier. The decision to ditch the Employment Bill betrays workers in the sector and leaves them exposed to exploitation.

Rampant tip theft

Tip theft is something that’s getting increasingly worse for the country’s two million hospitality workers, and is even now risking the future of the industry in an unprecedented crisis. 

Employer’s having questionable policies on staff tips are far from new. In 2016, it was reported that around two-thirds of employers in the hospitality sector were making some sort of deduction from staff tips. But during the pandemic as more and more people started to pay by card—80 percent of tipping now happens electronically, making it easier for bosses to take money meant for their staff—the practice has become more widespread and the rate of tip theft by employers is only getting worse. 

Restaurant chains like Las Iguanas, Gaucho, Prezzo, Zizzi, Carluccio’s, Ask Italian and TGI Fridays, to name a tiny selection, have all been accused of taking their staff’s tips in recent years. Then there’s the Pizza Express workers who spent the last year using strike action to force the restaurant chain to stop it from reducing staff’s share of tips from 70 percent to 50 percent.

And they’re just the chains that are big enough to end up getting news coverage. In the UK’s nearly 80,000 pubs and restaurants, most of which are independents or smaller chains, tip theft is rampant, with one in five hospitality workers saying their boss keeps every penny of tips they earn. 

Tips or service charges are intended to be shared among the staff as a ‘thank you’ from customers for their experience, and are understood as being vital to the earnings of workers who are often in poorly paid and precarious work. Nobody leaves a tip because they want to fill the pockets of the owner of the company. 

The practice of tip theft is inherently underhand whether it is done formally or informally. The majority of workers don’t trust that their boss or manager is honest about the tips they receive, and in most cases, customers aren’t aware that this money is being skimmed. A public consultation found that over two-thirds of people believed tips belong to staff and that employers should not be involved.

Insecure and exploited

Already low-paid staff who depend on gratuity to make up their earnings are cheated out of significant amounts as a result of the practice, with one report estimating the cost to full-time workers to be £140 a week. Tip theft is abhorrent at any time, but it is especially damaging and loathsome in the midst of a cost of living crisis. 

All this cuts to the real issue here—the unspoken fact at the core of hospitality work. The one that gets whispered in hushed tones after shifts or traded like currency by current and former staff. Simply put, it’s a pretty dire industry to work in.

Surveys have found that as many as 89 percent of staff in the hospitality industry have experienced one or more incident of sexual harassment. 83 percent of bar staff earn under £10 an hour and more than one in seven across the hospitality sector were paid below the minimum wage.

Across every sector, accommodation and food have the highest number of workers on zero-hours contracts (13 percent). Those on already exploitative zero-hours contracts are also almost twice as likely to experience unwanted sexual behaviour at work. If you speak to any current or former hospitality worker they will have stories of abusive managers, unpaid overtime and all day shifts at the very least. 

One survey for the British Heart Foundation found that hospitality workers were more likely to be smokers than those in any other industry. It’s been an old joke among bar staff for as long as I can remember that the reason so many end up smoking is that it’s the only way you’re ever able to get a break while on shift.

The precarious nature of work in the hospitality sector and the lopsided balance of power in between staff and bosses makes it ripe for exploitation. Striking staff in Scotland recently told Tribune about being made to fix electrical faults while wading through raw sewage and managers illegally docking hours for those who complained. 

Then there’s Covid. For well over a year, as lockdowns left the hospitality industry completely or partly shuttered, huge numbers of hospitality workers were on furlough. But while furlough allowed millions of workers to survive the pandemic, hospitality workers in particular were in a dire situation.

Almost two million people in the UK earned below the minimum wage in 2020, four times the normal number, as employers in the lowest-paying industries refused to top up furlough payments beyond the 80 percent of their regular wages provided by the government. That meant 39 percent of workers in hospitality were left struggling to survive for over a year on less than minimum wage. As a result, many simply chose to leave the industry.

An industry in crisis

Tribune has reported on the problem before, citing among others, a head chef who quit to become an Amazon delivery driver. You have to ask how bad the situation was that opting to work in the gig economy for Amazon seemed like an escape.

With a combination of low pay and poor working conditions, it’s far from surprising the industry is in crisis. Hospitality is facing some 400,000 vacancies according to trade group UK Hospitality, the highest number of unfilled jobs on record. Part of that is due to Brexit—between March 2021 and 2022 the share of EU staff working in hospitality fell from 55 percent to 48—but it’s also a crisis that has continued to get worse in recent months and which shows no sign of abating. 

Pubs and bars now find themselves unable to open from staff shortages, while Westminster Council has even found itself having to launch a £1 million scheme to try and fill job vacancies in an attempt to keep the bustling bars and clubs of the country’s capital running.

But the reality is that if you don’t address the fundamental problems with the hospitality sector—the insecurity, the abuse, the dire pay—it is delusional to imagine that the shrinking pool of workers will decide to come back en masse.

After hours on their feet with no breaks, abusive managers and customers, and no security for their future, the very least workers should expect is to be able to go home with the tips they are given. With the ditching of the plan to ban tip theft, the government has demonstrated yet again that it is unwilling to prevent the exploitation of workers let alone give them a basic level of pay and security. The nation’s hospitality workers are only going to get what they’re worth by organising and fighting for it.