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UKHospitality urges fairness to all parties in new tipping legislation

Published:  27 September, 2021

The introduction of legislation regulating the sector’s management of staff gratuities has been welcomed by UKH, with a major caveat.

New rules on tipping in the UK are set to come into force before 2022. They will make it illegal for companies not to pass on tips to their employees, while rule breakers could face an employment tribunal.

“UKHospitality supports the right of employees to receive the deserved tips that they work incredibly hard for,” said UKH chief executive Kate Nicholls.

She added: “The hospitality sector as it begins to rebuild after 18 months of restrictions and enforced enclosure is already creating new jobs and driving the jobs recovery. Ensuring employees receive the tips they earn will further strengthen the sector’s ability to create jobs and support the wider economic recovery.”

Labour markets minister Paul Scully said: "Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.”

The fair distribution of tips and hospitality service charges has long been controversial subject among business owners. In 2016, TV chef Michel Roux Jr announced his decision to scrap the service charge on all diners’ bills in 2017, after conceding that Le Gavroche used the 13% additional fee as revenue, rather than sharing it among staff.

However, Nicholls has issued a warning about coming down too hard on businesses already struggling to survive.

“For hospitality businesses, though, customers tipping with a card incurs bank charges for the business, and many also employ external partners to ensure tips are fairly distributed among staff,” she said.

“With restaurants, pubs and other venues struggling to get back on their feet, facing mounting costs and accrued debts, we urge the Government to continue to work closely with the sector as it introduces this legislation to ensure this works for businesses and employees.”

According to UK Hospitality, almost 10,000 licensed premises have closed since March 2020, waving goodbye to more than £87bn in sales.