Under the final version of the UK’s Code of Practice for Fair & Transparent Distribution of Tips, which bans businesses from withholding tips, hourly-based staff in restaurants, cafes, pubs, hairdressers, and taxis must receive 100% of tips.
The updated version of the code comes along with the statutory requirements laid out in the Tipping Act . Let’s break them down:
What’s Changed
Digital Tipping Dives into the Spotlight
The Code acknowledges digital tipping, where customers tip directly through apps like TipJar (which is integrated with Deputy), bypassing employers completely. It’s a nod to how technology is reshaping our thoughts about gratuities.
Non-Monetary Tips Join the Conversation
Non-monetary tips, such as vouchers, tokens, or any item exchangeable for money or goods, fall under the scope of the legislation if they’re controlled or significantly influenced by the employer. This inclusion ensures all tips are managed fairly and transparently, respecting the intention behind each customer’s gesture. It’s also an important reminder that value comes in many forms.
Timely Payouts Take Centre Stage
Despite discussions about potentially retaining tips during busier periods to even out during slower months, the legislation mandates that tips must be passed on to employees by the end of the following month. This emphasises that tips belong to workers promptly and are a gesture of customer gratitude, not a guaranteed income.
Agency Workers: A Clearer Picture
The inclusion of agency workers remains largely unchanged; however, a new clause clarifies that businesses passing tips to an agency must ensure these are transferred to the workers without unauthorised deductions. This is a crucial step towards fair treatment for all staff, regardless of their employment status.
A Fair Shake: Factors Worth Noting
The dialogue around fairness gets deeper with the inclusion of “hours worked” as a factor for consideration in tip distribution. This, alongside other factors such as:
Is the worker’s type of role front of house or support?
Basic pay and terms of engagement
Hours worked and individual or team performance
Seniority and responsibilities
Customer intent
Transparency is Key
Transparency remains a cornerstone of the new Code. Employers are responsible for ensuring all employees know and understand the tipping policy. This policy must be clear, accessible and shared fairly among all staff, including agency workers.
What this Means for You and Deputy:
At Deputy, we’re all about empowering the heartbeat of the hospitality industry - that’s you! Deputy has been working hard to ensure our platform handles these regulations smoothly. We’re here to ensure that you’re ahead of the game when the time comes.
We’ve compiled this blog and on-demand webinar on navigating the UK’s tipping legislation, which details all you need to know about the new legislation and how to best comply with it.
