Tips left by customers in bars and restaurants should go to workers in full - and not their employers, the Government has said in a report.
The eight-month review of of tipping practices follows claims that some "well-known" chains were counting tips as part of a worker's pay and were withholding some or all of the money.
The Government has announced a consultation on the proposals which include:
:: Updating the current voluntary code of practice and putting it on a statutory footing to increase employer compliance
:: Increasing transparency for consumers to make it clearer that tips are discretionary
:: Preventing or limiting any employer deduction from tips except for those required under tax law.
Business Secretary Sajid Javid said: "As a one nation Government we want workers who earn a tip to be able to keep it. That's why I, like many others, was disappointed by the tipping practices of some of our well-known chains. This has to change.
"I'm setting out our proposals to make tipping fairer, clamping down on unfair practices and securing a better deal for the millions of workers in the service industry. We will look closely at all the options, including legislation if necessary."
A call for evidence received nearly 200 responses and there was broad agreement that current practices were not clear for workers or consumers, and change was needed to better understand how tips are distributed.
The Unite union's officer for the hospitality sector, Dave Turnbull, said the report was "fantastic news".
"It is a massive victory for all those waiting staff who have worked tirelessly to expose sharp practices in the hospitality industry. All they want is what any worker wants - to take home what they have earned, no corners cut.
"This should be great news for consumers, too, who have been appalled to learn that the tips they left for their waiter or waitress never made it to them. Diners have been a huge support to the workforce - without their help we may not have ever won pay justice.
"The problem has always been that tips paid on a credit card and service charges are deemed the property of the employer. As they own them they can do what they like with them. Until staff are recognised as the lawful owners of their hard-earned tips with complete control over how they are shared out, rogue employers will continue to cream off staff tips."
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