9 takeaways from The Caterer’s Tipping Summit

The new tipping bill came into force on Tuesday (1 October) with the aim of ensuring hospitality employees receive 100% of tips, service charge and gratuities.

 

But complying with the new law is not as simple as passing on the entirety of funds received. The legislation has introduced a myriad of new rules around communication, record keeping and agency workers, with experts predicting there could be further regulations from the government to come as soon as next week.

 

Here are the key lessons from The Caterer’s Tipping and Payment summit, sponsored by Square.

 

1 Businesses need to be compliant now 

The Employment (Allocation of Tips) Act is now law, and employers should not expect leniency if they’re found to be in breach of the new rules.

 

Peter Davies, managing director of WMT Troncmaster Services, said there would be no grace period, particularly as the implementation of the legislation had already been delayed.

 

The rules apply to all funds received from 12.01am on 1 October and failing to adhere to them could result in financial penalties and bad publicity for businesses.

 

2 100% of employer-received tips must go to employees – no exceptions

All tips, gratuities and service charge that pass through the hands of a business or are managed or controlled in any way by a business must be paid to employees in full. No deductions will be allowed, including for administration costs or credit card fees.

 

The only funds outside the scope of the legislation are tips paid directly to an employee where the employer has no oversight of the distribution of funds (such as cash or card payment direct to an employee’s bank account).