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UPDATE: Allocation of Tips Act

We refer again to The Employment (Allocation of Tips) Act 2023, the new tipping legislation that will come into force on 1 October 2024, which has had mixed responses from the hospitality sector. 

Many businesses share the position that the increased costs of administering the legislation will potentially force them out of business. 

Others, such as the widely reported trial of Ping Pong, are finding new ways to replace such revenue, abolishing tipping but introducing a so-called ‘brand charge’ whereby diners pay a voluntary 15% charge.

The restaurant industry is reporting that in a report commissioned by Three Rocks, Tipping point: How new legislation will impact hospitality, data suggests that two thirds of businesses are yet to comply with the new legislation including taking a percentage of tips from employees. This ranges from continuing to take a contribution of tips to cover processing fees to simply withholding a percentage of the tip received, as well as keeping employees in the dark as to current and proposed tipping procedures.

This new legislation protects all workers, including zero-hours contract workers, and there is no transition period. All written policies required will need to be in place by the end of September 2024, likewise tipping records, as employees are able to request to see a copy once every three months.  The government has also published an updated version of the code of practice to help businesses prepare for the new legislation.

Posted on 06/05/2024 by Ortolan

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