New legislation could see millions of UK workers taking home more money in tips as the government introduces a Code of Practice on tipping that comes into force in October.
Millions of UK workers could take home an estimated £200 million more of their hard-earned cash, according to the government, as new legislation on tipping comes into force from the first of October. The legislation will require many employers to overhaul the way that they manage tips and it could benefit more than two million workers across the hospitality, leisure and services sectors.
Many hospitality workers rely on tips to top up their pay and are often left powerless if employers don't pass on service charges from customers to their staff.
The Code of Practice on the fair and transparent distribution of tips will make it unlawful for businesses to hold back service charges from their employees, ensuring staff receive all of the tips they have earned. The government is encouraging all businesses to follow the new requirements before they come into legal effect.
Commenting on the new legislation, Rufus Hood, country manager UK at Coople, said: "On 1 October, the government's 'Tipping Act' will come into force, meaning that companies that collect tips from customers will have new legal responsibilities regarding distributing them among staff, including agency workers. Companies will also be required to have a written tipping policy and share it with staff, as well as being required to keep records of any tips for three years.
"This will mostly apply to companies where customers regularly pay tips either with cash or card - putting money in a tip jar, making a card payment, or scanning a QR code. Any business where the employer receives the tip before the staff do will now be required to pay their employees their tips by the end of the following month."
Rufus Hood describes this as "major news for the hospitality sector, particularly bars and restaurants". He added: "On one hand, the Act puts additional pressure on businesses in an industry that is already facing high costs and low bookings. However, agency workers will now be legally entitled to the tips customers decide to pay, which will be very welcome news for these staff, who make up a large proportion of the workforce in hospitality."
Written by Rachel Miller.
