Tipping point - How EPS can help you comply with the new tips legislation
New legislation on tips has been granted Royal Assent (the thumbs-up by the King) and is due to come into force in 2024.
The purpose of the new legislation, The Employment (Allocation of Tips) Act, is to ensure that all tips, gratuities, and service charges (“tips”) are shared out fairly to staff and paid without any deductions being made (apart from those required by tax law).
So, what do employers need to do? The main things employers have to be aware of are the following:
They will need to give 100% of qualifying tips, gratuities, and service charges to staff (with no deductions except for tax and national insurance) by no later than the end of the month, following the month in which the customer gave the tip.
Tips have to be distributed fairly between all workers at the place of business.
Employers will be prevented from making deductions from tips including for credit card fees, bank charges, payroll or other administration costs and commissions. These costs will need to be covered by the business.
Agency staff are to be provided with new rights, which means they must be awarded tips and service charges on the same basis as staff who are directly employed by the business.
Employees will be able to view their employer’s tipping record and will have the right to bring a claim in the Employment Tribunal if a dispute arises.
How can EPS by Eproductive help hospitality businesses when the new law comes into force? Here’s what Andy Gelleburn, General Manager a the Hilton Leicester Hotel says:
“The EPS gratuities module is simple and easy to use. It’s configured to suit our specific requirements, which ensures monthly distribution is complete in a few clicks of a button!”
Our Gratuities and Service Charges modules can be easily configured to suit any distribution timeframe, ensuring the new timeline rules can be adhered to.
When distributing the pot to employees (including agency workers), the module ensures that the full pot can be allocated either by cash values or weightings or a combination of the two, based on your company’s defined set of rules. This comes with a built-in sign-off process to ensure accuracy of data before being submitted to payroll for processing.
A full history of distributed values can be retrieved by company, property, department, and employee via our wide-ranging reporting module.
A full hierarchy is built into the module to ensure responsibilities can be defined based on the user.
You can ensure all your employees are up to date with your Gratuities and Service Charges policies by using our mailing distribution or documents functionality.
If you are a current client who does not use the Gratuities and Service Charges modules at the moment, please email our helpdesk to arrange training. If you are not a client but you like the sound of the modules (which are just a small part of our comprehensive people management system), then please get in contact by emailing info@eproductive.com.
