The owners of restaurants, cafes and pubs will be banned from keeping tips left for their staff under new government plans.
The move to make it illegal for hospitality firms to withhold tips from workers could help around two million people in the industry, the Department for Business claims.
Bosses could be taken to an employment tribunal if they break the new rules, meaning they may be forced to compensate workers or face fines.
‘These plans ensure tips will go to those who worked for it’
The new law, which is expected to come into force within the next year, comes after several High Street chains were accused of keeping tips or charging a percentage for "administrative costs".
Paul Scully, Labour Markets Minister said: "Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.
"Our plans will make this illegal and ensure tips will go to those who worked for it".
Research suggests that most tips are now paid by card in the UK - and not cash.
This means that businesses who receive tips by card currently have the choice whether to keep it or give the money to workers. Cash tips are legally the property of staff.
The new law will also introduce a code of practice which will set out how tips should be distributed, as well as requiring employers to pass on all tips, service charges and gratuities without any deductions.
Employees will also get the right to request information on their boss’s tipping record.
‘We need to see more people lifted onto a real Living Wage’
Graham Griffiths, Living Wage Foundation interim director, told the BBC: "If this work is to be truly valued we need to see more people lifted onto a real Living Wage.
"To build a stronger and more dynamic economy, our focus should be on increasing the number of businesses doing the right thing and committing to pay a Living Wage".
A version of this article originally appeared on NationalWorld.com