(qlmbusinessnews.com Wed. 2nd Oct, 2024) London, UK —
Service Workers Secure Rights to All Tips with New UK Law
A new law, coming into effect this Tuesday, ensures that workers across England, Scotland, and Wales must receive all tips given by customers, regardless of whether they are paid in cash or via card. This law, which impacts over three million service workers, prohibits employers from retaining any portion of tips.
Employees from various industries, particularly those in hospitality sectors such as restaurants, cafes, bars, pubs, hairdressers, and taxi services, are expected to benefit the most from this legislation. If businesses violate the new rules, workers will be entitled to bring claims before an employment tribunal.
Under the law, all tips must be passed on to staff by the end of the following month after they are received. However, employees are still required to pay tax on their tips, as was previously the case.
A Win for Low-Income Workers
Tom William, a property developer who previously worked in a chain restaurant, recalled a practice where the company deducted 3% of the value of all food and drink sold by serving staff from their wages, whether or not a customer left a tip.
“I'm thrilled about this law,” Tom said. “It gives protection to those on low wages and in shift-based work. When I worked in the industry, they essentially said, ‘Pay up your 3%, or you’re out of a job.'”
Bryan Simpson, hospitality organiser for the union Unite, welcomed the change, noting: “These are the lowest-paid workers in the British economy, and they will benefit significantly from this new protection.”
The Law's Impact on Businesses
Nisha Katona, owner of Mowgli Street Foods, expressed support for the new law, highlighting its importance in safeguarding young workers. “Young people rely on legal protections to ensure they get their tips,” she said. However, Katona acknowledged that some businesses might struggle with the changes. “There will be casualties—some companies simply aren’t prepared for this.”
Tom Howes and Dory Czicza, employees at Fish’o’licious in Great Yarmouth, shared their views. Dory, a waitress, receives tips directly from the till, while Tom, a fryer, does not receive tips but is compensated with higher wages. “Tips are for service, not for the business,” Tom explained.
At The Kitchen in Ilminster, Somerset, owner Emma Webb said the new law wouldn’t change her practice of evenly sharing tips among staff. “We’ve always split tips fairly—everyone gets a share, and card tips are taken out of the till at the end of the day.”
Ensuring Fairness in Tip Distribution
Tom Moyes, a partner at Blacks Solicitors, said the new law aims to create greater transparency around how tips are distributed. Workers will now be able to request a breakdown of tip distribution every three months. However, questions remain about fairness in tip distribution, particularly when it comes to senior staff receiving a larger share.
The legislation has not yet been introduced in Northern Ireland, a situation the Unite union called “unacceptable.” A draft workers' rights bill is currently under consultation, with responses being reviewed, including proposals to ensure tips are passed on to workers in full.
Tipping Etiquette in the UK
Tipping practices vary across the UK. VisitLondon, the capital’s official tourist guide, suggests a 10-15% tip in restaurants, with similar expectations for black cabs and minicabs in London. However, tipping in pubs and bars is generally not expected. According to Kate Nicholls, chief executive of UK Hospitality, tipping in the UK remains at the customer's discretion, unlike in countries like the US, where tipping is often compulsory.
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