National Minimum Wage - Service charges, tips, gratuities and cover charges

Written by Ian Congreave - Filed under: National Minimum Wage on June 17th, 2009

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In order to fulfil its promise to exclude any tips whatsoever from counting towards the National Minimum Wage, the government is removing just seven words from the National Minimum Wage Regulations 1999.

Regulation 31 lists a number of payments which must be deducted from an employee’s pay before checking whether the minimum wage has been paid. They include

“any money payment paid by the employer to the worker representing amounts paid by customers by way of a service charge, tip, gratuity or cover charge that is not paid through the payroll”

The government’s objective is achieved by doing no more than removing the last seven words!

The Regulations that make this change, currently in draft form, will take effect from 1 October 2009.

Further information:
The National Minimum Wage Regulations 1999 (Amendment) Regulations 2009
Explanatory Memorandum to The National Minimum Wage Regulations 1999 (Amendment) Regulations 2009

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Written by Ian Congreave -

Filed under: National Minimum Wage on June 17th, 2009