Restaurants are set to be banned from keeping tips meant for staff as new legislation is expected to be announced this week.
A Government spokesperson said: "We are doing everything we can to back hospitality staff as the sector recovers.
"Workers should get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service. Further announcements on this key issue will be made shortly."
The Mail on Sunday has also reported that business secretary Kwasi Kwarteng wants to crack down on companies keeping the service charge when customers pay by card.
Although there is already legislation that means restaurants aren't allowed to retain cash tips, there has been nothing stopping restaurants from taking percentages of tips added via card transaction and several restaurant chains have been criticised for deciding to keep service charges paid this way.
But the new legislation will keep those hard-earned tips in the hands of the staff who have worked for them.
A Whitehall source told The Mail on Sunday: "Workers going above and beyond for their customers can now rest assured that their hard-earned tips will be going directly in their pockets and nobody else's.
"We're putting an end to dodgy tipping practices and making sure that hard work pays off. We are also levelling the playing field for businesses, ensuring that good firms which give all the tips to workers are not undercut by the firms which keep the money."
The Metro reported that among those restaurants criticised for keeping a hold of card tips was the famous River Cafe in London, who opted not to share the optional 12.5 percent service charge with their waiters.
They defended themselves by saying it helped guarantee they could pay workers the London Living Wage.
The new legislation follows a private members' bill tabled by Tory MP Dean Russell back in June.
In the summer he said: "When we look at the role that many people have when working in bars or restaurants and so on, the tips are often seen as part of the salary in a way - rightly or wrongly.
"It's always felt wrong to me that businesses can take the tips that have been given by the customer directly to that individual or to the staff for businesses to go 'Well, actually, that's part of the payment for what they're getting'.
"I think for most people, when they do leave a tip for someone, they've left it for that person or for the staff, not for businesses to take an extra chunk of it."
The hospitality industry has struggled to get itself going again in the wake of the pandemic as well as the impact of Brexit, having historically been reliant on EU workers.
The Office for National Statistics said in a report last week that businesses in the hospitality industry were more than twice as likely to be suffering from shortages, with almost a third of hospitality businesses said that vacancies were proving more difficult to fill than normal.
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