From October 1st, the UK’s hospitality industry faces significant changes with the introduction of the Employment (Allocation of Tips) Act 2023, commonly referred to as the "Tips Act." This new legislation is designed to ensure fair and transparent distribution of tips across all sectors, with a particular focus on industries like hospitality, where tips make up a substantial part of workers' income.
While this legislation aims to benefit everyone, from restaurant staff to hotel workers, it presents unique challenges and opportunities for both agency workers and the businesses that hire them. For agency chefs and other temporary hospitality staff, understanding the new rules is crucial to ensure they receive their fair share.
The core of the Tips Act is simple: it mandates that employers distribute all tips, gratuities, and service charges fairly to workers. Under the new law, employers will no longer be allowed to withhold tips or use them to cover business expenses. This ensures that hospitality workers receive the extra income they rightfully earn through tips.
For agency worker tips in hospitality, the legislation highlights some additional complexities. Agencies and employers will now need to collaborate closely to track tips and ensure these are allocated fairly. The law also mandates that employers provide a written policy explaining how tips are distributed.
Agency chefs, often hired on a temporary basis, play a pivotal role in the success of many restaurants and hotels. Despite the transient nature of their work, agency chef tips are as important as those for permanent staff. But until now, tipping practices around agency workers have often been unclear, leading to potential misunderstandings.
Under the new law, agency workers—including chefs—must receive tips in the same way that full-time staff do. The hospitality businesses employing agency chefs will need to communicate with agencies like Chefs for Chefs to ensure that any tips earned are paid correctly. These tips must be paid no later than the end of the following month in which they were earned.
If you’re working as an agency chef or in another hospitality role, here are some key things to be aware of:
Transparency: You are entitled to a clear explanation of how tips are distributed, whether they come directly from the employer or via the agency.
Fair Allocation: The law mandates that tips be distributed fairly. This means if you worked a busy service and contributed to the guest experience, you should receive a fair share of the tips for that shift, even if you're only on site temporarily.
Agency-Employer Collaboration: Agencies will need to work closely with their clients (hospitality businesses) to track the tips due to their workers. This may require new systems and processes, ensuring accurate collection and distribution.
Potential Delays: While the law dictates that tips should be paid as soon as possible, it also allows up to a month for distribution. As an agency worker, this may mean that any tips earned at the end of the month may be included in the next payroll cycle.
If you’re running a hospitality business and hiring agency staff, it’s essential to adapt your systems and processes. Here are a few steps you should take:
Establish a Clear Tipping Policy: Make sure your written tipping policy includes details on how tips will be distributed to agency staff. This should be shared with both your employees and the agencies you work with.
Track Tips: Whether tips are paid in cash or added to a service charge, you’ll need to track them to ensure agency chefs and other temporary workers receive their fair share.
Collaborate with Agencies: Work with your recruitment partners to set up a reliable process for reporting and distributing tips to agency workers. This is particularly important to ensure compliance with the law.
Avoid Missteps: Failing to comply with the new legislation can lead to disputes and potential penalties. Keeping a transparent and fair system in place will not only ensure legal compliance but also build trust among your staff and agency workers.
How To Report Tips to Chefs for Chefs
As it stands we request that clients report any applicable tips to us for each agency worker on a weekly basis, this means that we can accuratley manage any tips owed within the pay period. For instances where it is not feasible to do so for you, you can always report on a monthly period, by using the tool too! Information you will need.
The Week ending date
The agency workers name
The amount of tips owed
All information that is required for you to allocate the tips are available on the PDF copy of the timesheets and invoices you receive from Chefs for Chefs on a weekly basis. to access the Tip Reporting Tool, just Click Here.
For many hospitality workers, tips represent a significant portion of their income, and this legislation offers new protections to ensure fair pay. For agency chefs and other temporary staff, the Tips Act provides clearer rights and improved transparency. While there may be some initial hurdles for both agencies and employers to overcome, the long-term impact is positive.
Ensuring that agency worker tips in hospitality are fairly allocated will improve morale and incentivize excellent service, benefitting both staff and businesses.
In conclusion, the new tips legislation is a step in the right direction for fairness and transparency in the hospitality industry. For agency chefs, this ensures that your contributions are rewarded, whether you’re working a single shift or over several weeks. Now more than ever, it’s essential for hospitality businesses and agencies to collaborate, ensuring that everyone benefits from the tips they’ve earned.
If you have any questions on the legislation, please contact us here
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