MINIMUM WAGE MAY MEAN PAY cutbacks

by Christina Golding

IF TIPS are included in the minimum wage, waiting staff and other low-paid hospitality workers could end up with even less take-home pay than they receive now, warn unions.

A leaked report from the Low Pay Commission (LPC) says that payments such as "tips and gratuities" paid through the payroll, including service charges, should count as part of the hourly minimum wage.

It is widely believed that the Government will accept this idea because it will mean increased tax revenue, as more cash payments will go through the books.

But unions say that unscrupulous employers could abuse the system to enforce pay cuts, further penalising those that the legislation seeks to protect.

Dave Turnbull, regional organiser at the TGWU, said that some employers may take over traditional tronc systems, where staff share out tips and are individually responsible for paying tax. This, he said, would enable them to cut the basic wage.

The British Hospitality Association (BHA) conceded last week that some could use this to slash wages.

A BHA spokesman said: "It may be possible that some employers would do that," but added that exclusion of tips would mean huge wage hikes and job losses.

The report, to be published this week, also suggests that an allowance for accommodation should be made. This will maintain the current system, where live-in staff receive a reduced salary, but it is understood that it will give a limit to the amount that employers can charge staff for rent.