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Article: Are Tips A Top Up Or Part Of The National Minimum Wage?
- Article from:
- Mondaq Business Briefing
- Article date:
- July 30, 2008
CopyrightCOPYRIGHT 2008 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The Issue
Businesses are required to pay their staff the National Minimum Wage but some businesses have relied on tips to supplement staff income for the purposes of reaching the National Minimum Wage.
National Insurance Contributions are not due on gratuities that are distributed direct to staff under a tronc system not controlled by the business itself (saving the business 12.8% and the staff 10% of the receipt).
However, the Employment Appeal Tribunal has now decided that these tronc distributions are not money paid by the employer and cannot be counted as part of the National Minimum Wage.
The Consequences Businesses ...