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13th August 2008

Tips law will make restaurants worse off

Written by: Admin
Restaurants, cafes and bars will be worse off in the autumn as the new law that says employers can't use tips to top up wages comes into effect.
The practice, also known as 'troncing' is common practice in many chains and after high profile campaigns by The Mirror and The Independent newspapers. A report from PricewaterhouseCoopers (PwC) has highlighted how restaurants, cafes and bars will find themselves worse off. Andrew Garbutt, director at PwC, the accountancy firm explained: "Currently, the average base pay for waiting and bar staff is around £3.50-£3.75 an hour plus tips. In fact, base pay can be as little as £2 an hour. However, by the time this change is introduced the minimum wage will be set at £5.73 an hour, with tips on top." Adding that "the impact ... of this change will be to raise costs for the average chain by up to 10 per cent."