I was recently interviewed by The Telegraph about the decline in tipping, due to the growing use of contactless card payments…

And, as the tips debate continues, businesses are now rightly being told that they must communicate how they share and allocate tips fairly and transparently, as The Employment (Allocation of Tips) Act 2023, comes into force from 1 July 2024 in England, Scotland and Wales.

In The Caterer, Holly Freuchen states that: “Businesses need to make decisions about how tips will be allocated and – crucially – ensure all staff know about it. Businesses will need to implement new rules on how tips are shared from 1 July 2024 or risk enforcement action from workers in a tribunal. With the tribunal able to award compensation to workers, as well as make a public declaration that a particular business does not share tips ‘fairly’ and ‘transparently’, it is important to get things right.”

Reporting on restaurant tips, The Evening Standard said; “The theory is simple: the bill is for the food, the tip is for the staff who’ve served it.”- But, is it always that clear cut?

Last week, a London restaurant chain came under fire as they ditched tips altogether and instead introduced a 15% “brand charge” in order to increase staff wages. Ping Pong’s decision came just months before the new act and unions hit out, questioning if this is a way to circumnavigate the upcoming change in law.

In The Evening Standard, Unite’s Bryan Simpson said that ‘offering £1 above the minimum wage to replace “a healthy per hour tip rate” is “a complete slap in the face” for staff.’ – “Ping Pong’s decision to effectively deny workers tips by cynically changing the service charge to a ‘brand charge’ in order to circumvent the new fair tips legislation is one of the most blatant examples of tips theft that we’ve come across as the union for restaurant and bar workers,” he said. “No matter what senior management call it, customers will assume that this 15% is a tip that should go to workers, but it won’t. That is completely disingenuous.”

Getting tips right is crucial!

As a customer, I love to tip good service. And, as an employer, I have always given the team the full allocation of tips and I don’t think there should be any challenge on this.

Matthew Hutton, an accounting senior manager at Armstrong Watson, shared some great steps on ‘How to prepare for the Tipping Act’ with The Scottish Financial News, please click here to read.

Leaders need to take time and prepare for new rules to guarantee all ‘qualifying tips’ given by customers are fairly and wholly distributed. Ensuring that the decision is communicated clearly to staff, customers, agency workers…

So, if you want to start a conversation and become a savvy 21st Century Hospitality Hero, please join our free online community – https://www.facebook.com/groups/thehospitalityheroeshub – I have also created an online training programme, which also runs as a fully interactive 8-week course, where I encourage hospitality leaders to face challenges head on, and find fresh ways to work through them. Please find out more here: https://thehospitalityhero.com/hospitality-heros-live/





Source: https://www.dailymail.co.uk/news/article-13012583/Cafes-restaurants-service-charges-customers-cashless.html

Source: https://www.telegraph.co.uk/money/consumer-affairs/tip-cash-decline-service-charge/

Source: https://www.thecaterer.com/business/how-to-share-tips-fairly-transparently

Source: https://www.standard.co.uk/going-out/restaurants/tipping-service-charge-controversy-ping-pong-b1149674.html

Source: https://www.scottishfinancialnews.com/articles/matthew-hutton-how-scottish-hospitality-businesses-can-prepare-for-the-tipping-act