Wednesday, October 1st marked the one year anniversary of The Employment (Allocation of Tips) Act 2023. This tipping act came into law in October 2024 to reform tipping practises across the UK and ensure transparency for staff.
Here’s what we have learnt one year on:
The holiday pay confusion
When calculating holiday pay, employers must consider a worker’s usual tronc earnings. This means that holiday pay should include an extra amount, to reflect a worker’s typical pay including tronc earnings. However, it’s important to note that this additional amount should not come from the tronc fund itself.
This Act affects everyone
This act doesn’t just affect big businesses; it affects operators of all sizes in the industry.
The details matter
Ignoring smaller details, such as having an up-to-date tipping policy accessible to all your staff, is the downfall of many businesses. Clear communication with staff is key.
The Act doesn’t only affect front-of-house staff
Some employers think that only front-of-house employees (waitstaff, bartenders, etc.) are impacted. The Act covers all employees who receive tips, including back-of-house staff, so businesses need to ensure that all team members are fairly considered in the distribution.
Key Takeaways
The Tipping Act has been a gamechanger for hospitality employees across the UK. While it is a positive for the hospitality industry, if your business is underprepared for the act you could face legal and financial repercussions. Get in touch here to find out how we can help.
