The Government today launched a consultation on proposals to ban hotels and restaurants from using tips to make up national minimum wage.
Employment minister Pat McFadden said: "When people leave a tip they expect it to go to staff on top of their pay, not to be used to make up the minimum wage. This is an issue of fairness and common sense.
"We also want employers to make it clear how they distribute tips so that customers know where their money is going."
In a statement, the British Hospitality Association said: "It is vital that the change is implemented in the right way to protect the thousands of employees in the industry, whose jobs could be at risk from the increased costs this change will place on businesses during a time of economic downturn.
"In order to reduce the risk of job losses and business failures, the industry needs time to adjust its financial and operational models."
The BHA said it is working with its members to develop a best practice guide to ensure customers feel confident about how their tips are used.
The guidelines will seek to boost customer confidence and enable the hospitality industry to demonstrate its commitment to transparency.
"The union will not accept a situation whereby the industry which has so far publicly denied the concerns of their staff and customers around tipping, to be allowed to merely go on regulating themselves," he said. "Government action is overdue as staff must not be forced to wait on their employer."
By Daniel Thomas
E-mail your comments to Daniel Thomas here.
Looking for a new job? Find your next restaurant job here with Caterersearch.com jobs