Preparing for Yet More Legislation – Tips

Your tronc should be run by a recognised tronc committee who have full control over the distribution and allocation of money

By Fourth|Oct 5, 2018|2:30 pm CDT

Theresa May this week pledged to legally prevent foodservice employers from deducting money from tips given by customers to servers and bar staff. It follows a public consultation that ended two years ago, where restaurant customers were overwhelmingly in favour of tips going to the people who served them.

Currently, cash tips are the legal property of staff and must either go straight to the server, or be pooled and shared out among staff. Tips paid on credit or debit cards, however, currently belong to the restaurant owner who has no legal duty to hand any of them over to staff. Last year, UKHospitality developed a Code of Practice, approved by Unite, which deals with the fair distribution of tips among all staff, not just servers. According to Kate Nicholls, Chief Executive of UKHospitality, the best practice has been promoted across the hospitality sector, and there is no evidence to suggest tips are being withheld from staff. It’s unclear at the moment exactly what the legislation will entail, and what the impact on staff will be. For example, if the legislation requires all tips to be given to serving staff this could reduce the income of back office staff who can currently benefit from a portion of tips under a tronc system. And this seems to be the direction it’s heading as the press release published on 1st October states the legislation “will set out that tips must go to the workers providing the service”. The press release also states that the legislation will be introduced “at the earliest opportunity”, adding yet another compliance burden on hospitality businesses in an area that is already very complex. Getting it wrong currently can lead to demotivated staff and potential lost profit if too much is paid out. New legislation will likely introduce additional risk in terms of fines and penalties, so it will be more important than ever to have robust systems and processes in place to manage service charges and tips. If you don’t already have a tronc system in place, now would be a good time to consider setting one up. Here’s a few things to consider:

You’ll need a system of recording and allocating tips in line with the wishes of the tronc, and will also need to demonstrate company policy and procedures to HMRC inspectors as necessary. Fourth’s Workforce Management solution can help you manage this process:

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