Life Beyond the U.K. Tipping Legislation: The Exciting Road Ahead for Hospitality - By Dan Hawkie, CCO of TiPJAR
The changes in the new legislation are significant, aiming to bring much-needed transparency and fairness to how tips are distributed across the hospitality sector and other tipped industries.
As of October 1st, it’s official: The Employment (Allocation of Tips) Act is now live!
The changes in the new legislation are significant, aiming to bring much-needed transparency and fairness to how tips are distributed across the hospitality sector and other tipped industries. Throughout the development of this act, TiPJAR has been collaborating closely with the Department for Business and Trade, lending our expertise to help shape a framework that truly meets the needs of both workers and businesses.
For those looking for a deeper dive into the specifics, we’ve created a range of resources you can access here. But now that the Fair Tips Act is in effect, it’s not just about compliance; it’s about embracing this change and understanding the broader benefits it brings.
A win-win for businesses and employees alike
The new tipping legislation is not just a legal obligation but a powerful opportunity for operators to build stronger, more motivated teams. Yes, there are potential penalties for non-compliance, but let’s focus on the opportunities:
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Guidance:
For far too long, there hasn’t been a level playing field regarding how operators manage tips or tronc, which has meant those that are doing the right thing, haven’t always reaped the rewards in the same way as operators that may have mismanaged these funds. Undoubtedly there are contentious issues with the legislation but at least everyone now must follow the same rules, and those that look after their teams fairly will inevitably come out on top.
- Better attraction and retention:
Fair and transparent tipping practices are not just the law now, they can also be a powerful tool to attract, engage, and retain top talent.
- Cost savings:
With a legitimate tronc policy in place, employers don’t pay national insurance on tips, which could save your business thousands.
- A more motivated team:
By utilising technology, we have a much better opportunity to enhance our tronc policies to reward better performance. With service charge now being so widely used, it has unfortunately bred complacency in pockets of our sector, which has led to diminishing service levels. By rewarding team members appropriately for working busier shifts, providing better service and selling more, this is a great opportunity to stand out from your competition.
This is just the beginning...
The Fair Tips Act marks a significant shift, but there are still plenty of opportunities on the horizon. At TiPJAR, we’re excited to explore new ways to enhance the benefits of tipping for both employees and employers:
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A ‘bank-like’ savings pot: Imagine a separate pot where employees can save their tips with interest—like a digital piggy bank.
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A digital card: Making tips go further than ever before. A dedicated card for employees to spend their tips directly, with access to hundreds of high street discounts and cashback.
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Financial education: We believe in empowering employees with financial knowledge, helping them gain greater financial freedom and security.
We’re fortunate to work in a brilliant industry where we hear heartwarming stories of the impact that tips can have on people’s lives. Life beyond the legislation is an exciting place for both employers and employees, and TiPJAR will be there every step of the way to support.
So, embrace the change, explore the opportunities, and let’s work together to create a fairer, more transparent future for everyone in hospitality. Exciting times are ahead!