A new code of practice was introduced earlier this week that will be effective from 1st October 2024 and will require you to make sure you pass on tips in full to your staff, that you are allocating them in a fair and transparent way and that you can prove it.
Key elements of the Act include:
- You will be obliged to pass on all tips, gratuities and service charges to workers without any deductions.
- Tips must be allocated between workers in a fair and transparent way.
- In businesses where tips are paid on more than an occasional and exceptional basis, a written tipping policy stating how tips are dealt with in the business is required. This policy should be made available to all workers.
- Tips must be received by staff, at the latest, by the end of the month following the month in which the tips were paid by customers. For example, if a customer leaves a tip on 22nd June, it must be received by staff by 31st July at the latest.
- You must keep and maintain a record of all tips paid by customers of the business and how they have been allocated and distributed between workers for 3 years from the date the tip was received.
- Workers have the right to request a copy of their tipping record so they may bring a claim to employment tribunal where they believe they are not receiving tips they should be.
- Employers must have regard to the code of practice on fairness and transparency of tip distribution when they are distributing or influencing the distribution of tips.
In preparation for this, HR Caddy recommend that you select a fair and appropriate method of tip distribution amongst staff, in line with the Act and code of practice, and introduce a tipping policy to clarify the business’ stance on this topic before 1st October 2024, we can help you with this.
