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Minimum Wage and Tipping

Volume 705: debated on Wednesday 19 November 2008

My right honourable friend the Minister of State for Employment Relations and Postal Affairs (Pat McFadden) has made the following Written Ministerial Statement.

Today I am launching our consultation on proposals to amend national minimum wage regulations that will end the practice of tips being used in payment of the national minimum wage.

Since the National Minimum Wage Act came into force in 1999, it has created a level playing field for employers in the payment of wages and an essential safety net for vulnerable and low-paid workers. Through this, we have seen a better rewarded and more committed workforce who have been a force in driving up standards.

Under the 1999 Act, the use of tips may count towards payment of the national minimum wage in certain circumstances. Some 10 years on, I believe that the time is now right to review this position to ensure equity for all workers and to create a level playing field in wages among employers.

In July 2008, we announced that we would be amending national minimum wage regulations to prevent the use of tips towards payment of the national minimum wage. Alongside this, we set out our plans to make tipping practices fairer and more transparent, as we believe that it is important that there is clear information for consumers about what happens to their tips.

Our consultation seeks views on the precise nature of regulatory change and on how to improve information and raise awareness for consumers.

I have arranged for copies of the consultation document and other related papers to be placed in the Libraries of both Houses.