Changes to The National Minimum Wage

From 1st October 2009 using tips to make staff pay up to minimum wage levels is no longer allowed.

Under the old rules where "tips" were given directly to an employee they could not count towards National Minimum Wage Levels. "Tips" includes all service charges, gratuites and cover charges.

 However, if the "tip" was a compulsory service charge or a voluntary amount that was added to a cheque or credit card payment, then it was the property of the employer and could count towards minimum pay levels, if it was paid to the Employee through pay roll.

Some workplaces use a special "tronc" system to distribute tips and gratuities. This is where a person appointed as "troncmaster" (someone other than the employer) is responsible for the arrangments to share the tips amongst employees. If tips are kept or paid directly into a dedicated troncmasters account and distributed diretly to employees then they were not able to be counted towards NMW.

If, however they were passed to the employer by the troncmaster, for distribution through payroll, they had been able to be counted towards minimum pay levels.

These latest changes to NMW legislation were designed to close gaps, such as those mentioned above, and ensure that no tips, regardless of how they are paid and if they are voluntary or not, will be able to be counted towards an employees wage.

In a further change, and also from 1st Ocotber 2009 the NMW for 16 and 17 year olds will increase to £.57 per hour, the rate for 18-21 year olds will increase to £4.83 per hour and the rate for those over 22 will increase to £5.80 per hour.

Further help and information can be obtained by calling the Pay and Work Rights Helpline on 0800 917 2368.