Hospitality businesses urged to prepare for new tipping laws

A hospitality business adviser is warning owners of pubs and restaurants not to fall foul of new rules governing workers’ tips.

Lynne Blakey, a director in the Bristol advisory consulting team at Evelyn Partners, the wealth management and professional services group, said new legislation coming into force on 1 October requires employers to distribute tips fairly and transparently.

Many hospitality businesses are unprepared for the forthcoming changes to the Employment (Allocation of Tips) Act, she added.

“Employers will have to pass on 100% of service charges and tips to workers without any deductions under the new rules,” said Lynne, who has personal experience in the hospitality sector, having previously served as finance director at The Newt in Somerset for four years.

“Tips must be distributed at the place of business where they were generated within a specified timeframe. So the changes are likely to have a significant impact on employers who have held cash back in the past to cover leaner months, or pooled tips across several venues.

“Employers will need to have a written policy on tips, including how they manage and distribute them and will need to keep accurate records detailing how tips have been dealt with.

“Tips must be allocated fairly across all workers, including those on zero-hours contracts and agency workers. They will have the right to request information on their employer’s tipping record if they feel they have been shortchanged.”