The government is thought to have dropped plans to make it illegal for employers to withhold tips from workers.
A report in today’s Financial Times reveals that the idea has been dropped from the Queen’s Speech on May 10.
In September the government unveiled plans to overhaul tipping practices, which it said would help “around two million people top up their income”.
At the time, Labour Markets Minister Paul Scully 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. This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it.”
According to the government, 80% of all UK tipping now happens by card, rather than cash going straight into the pockets of staff. Businesses who receive tips by card currently have the choice of whether to keep it or pass it on to workers.
Kate Nicholls, UKHospitality chief executive, said at the time that the new rules would strengthen the sector's ability to create jobs.
She added: "For hospitality businesses, though, customers tipping with a card incurs bank charges for the business, and many also employ external partners to ensure tips are fairly distributed among staff.
"With restaurants, pubs and other venues struggling to get back on their feet... we urge the government to continue to work closely with the sector as it introduces this legislation to ensure this works for businesses and employees."
Sharon Graham, general secretary of Unite, told the Financial Times: “Every year this government promises action to ensure fair tipping, and then does precisely nothing to deliver on that promise.”
The plan has been dropped “for the foreseeable future” according to the report.