New legislation next year
The government has announced its plans to make it illegal for hospitality companies (including pubs, cafes and restaurants) to withhold tips from their workers. Legislation obliging operators to pass on tips will be introduced within the next year. The announcement is here
Currently, businesses who receive tips via card payment have the choice as to whether to pass these on to employees with only cash tips being the legal property of staff members.
How will this effect employers?
Once the new legislation comes into effect, employers will be obliged to share all tips, service charge and gratuities with staff with no deductions.
A new code of practice will be also be introduced which will detail exactly how tips should be distributed fairly between staff members.
What will be the consequences of non-compliance?
If you do not follow the new rules then you could be taken to an Employment Tribunal and forced to compensate workers and/or face fines.
Employees will also have the right to request information regarding your tipping record in order to support a claim they are bringing to an Employment Tribunal.
How can we help?
As experts in the hospitality sector we can help devise new policies and training for managers to ensure that they are compliant with the new legislation.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.