Employers are to be banned from using tips and service charges to "top up" staff pay to meet the minimum wage, under government plans.
Business Secretary John Hutton said there needed to be more transparency in tipping. He said hundreds of thousands of people in the UK have jobs in sectors where tipping is commonplace.
He added that employers need to make it clear how tips were distributed so that customers knew where their money was going and whether or not the establishment operated a fair tipping policy.
The changes are set to come into force next year.
BBC News website readers have been sending us their comments on this story.
Waiters and waitresses
I worked as a waitress for years. Where I worked it was written in the contract that you were not allowed to tell the customer where your tips went. If this does become law they will find a way around it.
Becky Daniel, York
I am a waitress but am wholeheartedly against tipping. Good service and food should be the norm, customers should not be expected to pay more for the service they should automatically be receiving, nor should they be expected to top up the wages of staff.
Theresa Thompson, UK
I worked as a waitress for almost two years in one restaurant chain, and indeed, our tips were being used to pay us the minimum wage. The cash tips were entirely left to us, but we never got any of the tips from the credit cards, and leaving your tip on a credit card is becoming more and more popular. When I started working there we were explicitly told to lie to our customers who asked if we were getting the tips from the cards by telling them we were. Then, after some discussion, we were allowed to tell them the truth if they asked.
I am a waitress in a mid-range restaurant where the tips are shared far from fairly. Tips are divided out by the supervisors, who are in turn told by the manager to take the lions share as they 'work harder'. In reality he fails to pay them for their increased responsibility for managing staff and tops this up with the waiters and waitresses tips. I may add that he also takes a proportion of the tips, far higher than any of the staff receive. Customers occasionally ask if I receive the tips left, when I can I am honest. I would rather people left no tip at all, than for it to go into the pockets of people it was never intended for. I would urge anyone eating out to ask, I frequently do, and it is only around 10% of the time that the tips are shared equally.
Victoria, Tunbridge Wells
I have worked as a waitress in many restaurants and pubs in the past so I cannot express my support for this change enough. It is high time that hard-working restaurant staff get what is rightfully theirs and that the greed of unscrupulous management is finally ended.
I am a post-graduate student and work part-time as a waiter. I get paid £4.10 per hour (below minimum wage!) and the tips I get from customers are used by the company to top-up my hourly rate up to the minimum wage. Even when customers ask us about whether we receive tips, it is company policy to say "yes", we get a lot of pressure from the managers to do this.
Anon, London, UK
I used to work for a restaurant and it disgusted me how the company used to work. Effectively they are short changing their customers and their staff. When customers pay for a meal they think that staff wages are covered. Staff can not refuse a tip, that was a sackable offence, so all you could do is watch as someone wastes their money, and you, the employee, gets nothing. A fantastic move by the government. Bravo!
Jack Davenport, Preston, UK
Restaurant owners and managers
My wife and I own a restaurant and we pay at least the minimum wage and split the tips up on a weekly basis between ALL staff worked out on a spreadsheet using a points system. This is good for the staff as after 10 weeks they can use the tips to show a lender they can afford a loan or mortgage. So far so good. However, because we do it this way we have to pay Tax and NI on the amounts both as an employee and an employer. Great for the government. Before everyone gets too excited about this brilliant new piece of legislation let's make sure it doesn't mean that it will now include VAT as well. We aren't talking about a moral or honest government here, we are talking about one desperate for cash and good sound bites. Oh and the dishonest restaurant owners will still get away with it. Another kick for us small businesses? It very soon will not be worth employing people in the UK.
Gerry Price, Windlesham, England
In my restaurant we pay National Minimum Wage or above and then tips are distributed fairly between all employees on top, as they have all contributed to earning them. Because we do this our staff must pay NI and PAYE on them so a good percentage goes to the taxman. Are our customers aware of this when they tip?
As a previous restaurant employee I found that tips were never shared amongst staff, the boss would put them in his own pocket which we all thought was unfair. I now own my own restaurant and for the last three years I have saved all the tips and at the end of each month I have equally shared them out amongst all members of staff, my team are now very well driven and motivated and the service level is fantastic.