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Hospitality businesses urged to act on new tipping regulations ahead of October deadline

September 23, 2024

UK hospitality businesses must prepare for new tipping regulations effective from October 1st, ensuring tips are distributed fairly and transparently to all staff, including those on zero-hours contracts.

UK hospitality businesses, including pubs and restaurants, are being warned to ensure compliance with new tipping laws set to take effect from October 1st.

Lynne Blakey, director at wealth management and advisory firm Evelyn Partners, is advising employers to prepare for the changes introduced by the Employment (Allocation of Tips) Act. This legislation mandates that employers distribute 100 per cent of tips and service charges to staff without deductions.

Blakey, who has first-hand experience in the hospitality sector from her role as a former finance director at The Newt in Somerset, stressed that many businesses remain unprepared for the legal shift. “The new rules require tips to be distributed transparently and fairly, at the location where they were earned, within a set timeframe. This will affect employers who have previously held back tips or pooled them across multiple venues,” she explained.

The legislation also requires businesses to establish a formal written policy outlining how tips are managed and distributed, and to maintain accurate records. Employers must ensure fair tip allocation across all staff, including zero-hours and agency workers, who now have the right to request information on their share of tips if they suspect discrepancies.