Changes to Tips

The hospitality industry has seen large numbers of employees leave the industry during the Covid-19 pandemic as employees look for more stable and sociable hours.

Combined with things like the tightening of immigration rules and general low pay in the industry, this has led to the sector’s vacancy rate being double that of the UK economy as a whole according to the Office of National Statistics.

One complaint that anyone who has worked in the hospitality industry will likely have had is the distribution of tips and cover/service charges. The Government has been consulting on the issue since 2016 and after a couple of delays, have finally outlined plans to bring in legislation that will deal with the handling of tips. The measures will include that employers are required to:

• Pass on tips without any deduction other than those required by tax law;
• Distribute tips in a fair and transparent way;
• Have a written policy on tips;
• Keep a record of how tips have been dealt with;
• Comply with a new Statutory Code that will be introduced;
• Deal with any tips within a set time period; and
• Respond to any request for information from an employee about their tipping record within 4 weeks

The above measures will likely come as welcome news for many of the 2 million workers employed in the hospitality sector. The estimated 190,000 business in the industry may, however, see it as yet another challenge as they look to recover from the impact of the Covid-19 pandemic.

The timeframe for these changes to come into force is unknown at this point, but as they will be coming in at some stage, it would be a good idea for employers to take steps to prepare for them and review how they deal with tips.

Do you need any assistance in putting a Tips Policy in place? Get in touch by giving us a call on 01246 932 100 or dropping us an email at hello@dawsonraford.co.uk