The British Hospitality Association (BHA) has hit back at claims that staff tips are still being used to top up wages to the national minimum.
Trade union Unite - whose members include pub, bar and restaurant workers - plan a protest outside the government's business department today.
It claims that parts of the hospitality sector have ignored legislation introduced a year ago that bans the use of tips to top up wages.
But a spokesman for the BHA said the industry had been complying with the law. "If Unite has proof then they need to tell the authorities because the industry knows that this is illegal and has been since last year," he said.
"I'd be very surprised if responsible retailers were still doing this because it is against the law."
But Unite claims the practice is still widespread. Officer Dave Turnbull said: "Unite has found that one year on from the campaign there are still too many employers who regard tips as a subsidy for low pay and who see the tips and service charge money left by customers as a pot of cash to which they are free to help themselves.
"Workers expected their employers to hear the demands of consumers last year to pass all the money they intended for staff to them - instead many businesses have chosen to continue business as usual and profit from the gratuity charges."
When the new law and Tips Code was introduced last year then Mandelson said that "tips are meant as a bonus - not a tool to boost pay to the basic minimum".