Tips to prepare for changes to UK legislation on tipping in hospitality
With the recent news the Employment (Allocation of Tips) Bill has passed its third reading we are thrilled to hear it's one step closer to being UK law! Here at EasyTip, we appreciate the complexities that processing and managing cashless tips creates for hospitality businesses and hope to help them navigate any challenges with our simple yet innovative tipping platform. Read on to discover ways your business can prepare now for upcoming changes to the law!
"It's always felt wrong to me that businesses can take the tips that have been given by the customer directly to the individual or staff for business to go, "Well actually, that's part of the payment for what they're getting'."
- Dean Russel, Conservative MP
What is the Employment (Allocation of Tips) Bill?
This bill, first brought forward in 2021, would amend the Employment Rights Act 1996 to require employers to ensure that all tips, gratuities and service charges they receive or exercise control over must be paid to workers in full without deductions and by the end of the following month. It would also enable the Government to create a code of practices intended to ensure fairness and transparency in how the money is allocated amongst staff, and introduce an enforcement mechanism for employees to make complains and seek redress.
In the press release that announced the plans, it states that 80% of UK tipping now happens by card, rather than cash. Currently where a business receive a tip by card, they have a choice as to whether they keep it or pass it on, either in full or a portion of it, to staff. As we move more and more towards a cashless society, this is a major issue the Government is stepping in to try and solve.
3 Tips for preparing your hospitality business for upcoming changes to tipping laws
What can you do now as a business to help your staff and prepare for changes in the law? Don't worry, we have you covered! EasyTip was founded on the principles that tipping should be 100% transparent and fair for all hospitality and service staff. Under the new legislation, staff can raise complaints, taking employer to an employment tribunal if they're breaking the new rules. This could mean compensation and fines, so it's important you're on top of what you need to comply with new laws. Here are 3 things you can do NOW to prepare...1. Eliminate discretionary and high service charge fees
Service charges can be a helpful method of collecting tips but there are some limitations. The charge often comes with additional fees, in the form of national insurance contributions, which ultimately reduces the size of the tips. With our platform, there is no need to pay additional large fees in order to receive contactless tips. The only fee we charge is nominal and covered by the customer 98% of the time. This is fantastic because, unlike with service charges, staff are able to earn more tips at no additional cost to the business.2. Gain contactless tipping transparency for your customers and staff
Not only will the new law require full and written transparency on how tips are recorded and distributed, customers also want to know the tips they pay are going to the staff to thank them for their service. Our tipping processes gives customers piece of mind their tip is 100% going directly to staff. This level of transparency helps customers feel confident that their contactless tips are going exactly where they want them to go, something that service charges aren't always clear about.
Transparency for staff is also key, our analytics dashboard records all transactions and tip payouts in real-time, so staff can see how much extra income they're earning at any given time. Personalised dashboards allow staff visibility on how tips are processed and distributed, whether based on working hours, individual teams or per individual. All monthly tip data can be downloaded in Excel or PDF at any time by accountants and business owners.
3. Allow your customers to tip as much as they want with contactless tipping
Service charges are limited to a fixed percentage of the bill. However, why not give your customers more freedom to choose their own tip to say thank you? Customers may want to tip more than your standard service charge allows. With our tipping platform, customers have more flexibility when leaving a tip, including both a suggested amount or to enter the amount that feels right to them.
Why you should start earning contactless tips with EasyTip
Earning contactless tips with us is quick, easy and 100% transparent for business owners, staff and customers alike. Your customers can leave a tip and review by simply scanning our QR code on your personalised merchandise or their receipt. All contactless tips are sent directly to the customer’s chosen recipient, or to the pot of tips to be shared based on working hours so everyone get's a fair share. Plus, appear on the staff member’s tipping profile where they can track their tips live.
Your business can benefit from our contactless tipping platform at no cost to you. So, why not sign up today for free? It’s quick, easy and free to join! Get in touch with us and we will be delighted to help you get connected to our contactless tipping platform.