Using tips to make up workers� pay to minimum wage levels will be outlawed from October, the UK Government announced yesterday.

Using tips to make up workers' pay to minimum wage levels will be outlawed from October, the UK Government announced yesterday.

Ministers confirmed the move after a long campaign by unions, and said they wanted greater transparency and clarity for customers in bars and restaurants through a new code of practice.

Thousands of workers will be guaranteed fair wages, while customers will be confident their tips will not be used to make up staff pay, said the government.

Employment Relations Minister Pat McFadden said: "When people leave a tip for staff they have a right to know that it will not be used to make up the minimum wage. It is also important for employers to have a level playing field on wages.

"This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum.

"Our consultation showed wide support for these changes, including from business groups, and we are working with them to ensure that consumers get the information they need."

The announcement is the government's response to a consultation on the use of tips, gratuities, service charges and cover charges in payment of the national minimum wage.

Derek Simpson, Unite's joint general secretary said: "The government are to be congratulated for doing the right thing by low-waged waiting staff and moving to close the loophole which has allowed greedy employers to use tips to pay staff the minimum wage.

"Hard-working waiting staff will be delighted to learn that bad employers can no longer line their pockets with the money that customers intended to go to workers.

"This is a triumph for the poorly paid in restaurants, bars and hotels across the country.

"However, there remains a need for a fully transparent tipping system where 100% of tips go to staff. Unite is unconvinced that the voluntary code of practice announced today will give consumers the clarity they need to be confident that any money they leave will go to the employees who deserve it.

"Workers will be waiting for the hospitality industry to demonstrate they will now sign up to the fair tips system that their customers and staff have demanded.

"Our experience of the hospitality industry does not inspire confidence in their ability to self-regulate on tips and services charges."

Steve Brooker, markets expert for Consumer Focus, said: "We are glad the government has listened to calls from Consumer Focus and other groups to close the outrageous loophole allowing employers to use tips to make up the minimum wage.

"This is a real victory for common sense, for both employees and consumers."