National Minimum Wage

National Minimum Wage
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●● Guidance on piece rates and the NMW which reflects business circumstances and clearly
sets out where Fair Piece Rates are, and are not, applicable.
●● Reinstating previously available guidance on the accommodation offset. A stand-alone
guide was available, and understanding of the offset would be improved if an updated
version was made available.
●● Specific guidance for migrant domestic workers, showing their entitlements under the
NMW Act (as is shown on the UKBA website).
4.56 We have again received evidence on a number of other operational issues and in the next
section, we consider the evidence on these and indicate where further action is necessary.
Operation of the National Minimum Wage –
Other Issues
Tips
4.57 Since October 2009 the minimum wage regulations have not allowed tips, gratuities, service
charges or cover charges to be used to make up NMW pay. At that time the Government
also introduced a voluntary Code of Best Practice on Service Charges, Tips, Gratuities and
Cover Charges, which had been developed through stakeholder discussions. The changes in
the law did not place employers under a legal obligation to pass on tip payments to their
workers, but the purpose of the Code was to make what happens to tips more transparent to
worker and consumer alike. The evidence we received confirmed the position reported last
year that there was a successful introduction of the new rules, with employers generally
observing the new arrangements. Unite confirmed that it was not coming across major
infringements of the rules on the use of tips and the NMW; although there may still be some
issues in some independent establishments. In oral evidence BHA said it regarded the
requirement not to use tips to make up NMW pay as a ‘settled issue’.
4.58 There remained a difference of views between worker and employer representatives on use
of, and compliance with, the voluntary Code. GMB said there continued to be very little
evidence in any restaurant or other tipping establishment of what happened to tips, while
BHA told us that the Code encouraged businesses to explain to customers what happened to
their monies. Unions were also concerned at what they regarded as evidence of inappropriate
employer influence over tronc arrangements, 5 and employers taking a larger slice of tips
monies. However, on the basis of the evidence we have received it appears to us that
employers are generally following the new NMW rules.
5 A special pay arrangement used to distribute tips, gratuities and service charges.