New laws regarding tipping come into force on 1 October, which could result in a loss of thousands of jobs.

The British Hospitality Association (BHA) claims that up to 5,000 jobs could be lost and might cost restaurants £130 million, when new laws regarding tipping come into effect on 1 October.

The government estimates that the real cost to the hospitality industry is actually more like £60m, half that claimed by the BHA, and say that in real terms it would mean just one person per restaurant may lose their job

Bob Cotton, of the BHA, responded: “One person’s job may not sound a lot. But potentially that’s quite a lot of jobs in these difficult circumstances.”

The new laws will make it illegal for tips to be used to make up staff wages, often to just the national minimum, and instead will have to pay salaries in full, thus attracting national insurance on the whole amount.

The theory of the new rules is that the waiters, waitresses and kitchen staff should all get a greater share of the tips. However, as staff will now be paying national insurance, they may actually be worse off. There is also a grey area over how credit card tips will be distributed.

Mr Cotton argues that instead of implementing such rigid legislation, restaurants should be open with customers and explain how the proceeds from tips and service are distributed to staff.

Unite the Union launched a Fair Tips Campaign in 2008, in conjunction with the Daily Mirror in order to support restaurant and hotel workers, creating a charter for restaurants to sign up to. For more information and to see which restaurants are listed as abiding to the charter, visit: www.fairtips.org