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Tips given to staff working in waiting and bar jobs will no longer count towards payment of the national minimum wage thanks to new legislation.

The planned changes will end the practice of employers using gratuities and service charges processed through the payroll to 'top up' staff wages to meet the current £5.52 per hour requirement.

Occupations in the catering industry are popular student jobs, but have seen some undergraduates pick up actual pay packets which fall below the level required by law.

A consultation on implementing the government's recommendations will be launched in the autumn.

Business secretary John Hutton said: "When people leave a tip, in a restaurant or elsewhere, they expect it to go to service staff and as consumers, we've got a right to know if that actually happens."

The plans are being put together by the Department for Business Enterprise and Regulatory reform, which leads the government's drive to raise UK levels of productivity and create the conditions for business success.

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