Night-time economy adviser for Greater Manchester Sacha Lord has launched calls for an industry-wide fair tipping policy, warning that a forecasted decline in gratuities post-Covid will have "massive financial consequences" for the sector's employees, most of whom are already on the minimum or living wage.
According to non-profit organisation One Fair Wage, average tips in US hospitality venues have declined following the Covid pandemic, a trend Lord predicts will inevitably follow in the UK.
The report found that 83% of hospitality workers had experienced a decline in tips following reopening, and 67% said tips have decreased due to having to enforce rules such as social distancing and facemasks.
Lord said: "Not only has Covid all but killed off cash, but the social distancing measures in place means less interaction between waiting staff and customers. It's likely we'll see a serious decline if not the end of tipping because of this.
"Bar and restaurant staff typically earn minimum or less than living wage, and rely on tips to top up their salaries. Tips can mean the difference between walking home after work and getting an Uber, so there's a clear safety aspect for operators to acknowledge if we do see a decline."
He has called for greater transparency and the introduction of a code of conduct for hospitality operators, backed by Greater Manchester mayor Andy Burnham, who has called for a new employment standard, which includes tipping, for the hospitality sector and night-time economy in his 2021 manifesto.
Lord added: "There's less transparency as to where tips are going when paying by card. Many operators don't pass on service charges to staff as a standard procedure, instead using them to top up the bottom line or subsidise chef salaries.
"Hospitality needs to operate fairly and introduce standards across the board including fair distribution. It's inevitable tipping will decline at the same rate as the US, and we need to look at ways of raising employee pay, such as price increases, so that tips become bonuses not essential substitutes for low salaries."
Trade union Unite has also backed the call. National officer for hospitality Dave Turnbull said: "A survey of hospitality members last summer, who had been redundant during the pandemic, painted a grim picture for the sector's future – for example, 78% of chefs said they would not recommend the career to school leavers.
"And if you take account of the impact of Brexit on accessing migrant workers, there will inevitably be a skills shortage that can only be addressed by real improvements in pay and conditions.
"The fair distribution of tips would help the looming recruitment crisis. Some years ago, the government pledged that they would bring forward ‘fair tips' legislation, but this seems to have fallen off the radar due to the pandemic – now, as we enter the post-Covid world, is the time to resurrect this embryonic legislation."