News
December 2007
Tips May Be Part of National Minimum Wage
A tribunal has ruled that in certain circumstances tips given to employees count towards the National Minimum Wage (NMW). A group of London food businesses took the case to court after HMRC claimed that some staff had not been paid the NMW between 2000 and 2003. The employees were paid between £3 and £4 per hour through the payroll plus substantial ‘tronc’ payments. The ‘tronc’ payments, made under deduction of PAYE, are money from service charges and credit card tips.
The tribunal ruled that although the tips were distributed by a ‘troncmaster’ using a separate payroll system this was to be regarded as part of the business payroll.
HMRC guidance on the treatment of tips and troncs is also contained in the link below.
Internet links: Publican article and HMRC guidance
