In the hospitality sector, where the delicate balance between service and compensation is a daily dialogue, a groundbreaking shift is on the horizon. A new law, set to come into effect on July 1, 2024, in England, Scotland, and Wales, is poised to redefine the dynamics of tipping, promising a fairer distribution of gratuities for over two million workers. This legislative overhaul, encapsulated in the Employment (Allocation of Tips) Act 2023, addresses a critical aspect of the industry that has long been the subject of debate and controversy: the distribution of tips and service charges.
The catalyst for this change traces back to 2016, following a public outcry and media spotlight on the malpractices and unequal sharing of tips among hospitality staff. With the upcoming law, the government aims to safeguard a staggering £200 million a year in tips for workers, ensuring that these additional earnings go directly to the employees, without any deductions by employers.
The Shift to a Cashless Society and the Role of Dojo Go
As society gravitates towards cashless transactions, the way tips are collected and distributed has come under scrutiny. Recognizing the challenges and opportunities this shift presents, innovative solutions like Dojo Go have emerged. Dojo Go is a cutting-edge card terminal that not only facilitates seamless transactions but also features an advanced Tip Initiated Payment (TIP) function. This functionality allows staff to collect tips directly through the terminal, offering a transparent, efficient, and equitable method of tip distribution in line with the new legislation.
Key Provisions of the New Tipping Law
The new law mandates that all tips and service charges must be allocated to staff, marking a significant step towards ensuring workers receive 100% of the gratuities left by customers. This move is especially pivotal for many hospitality workers who rely on tips to supplement their income, often earning the national minimum wage or living wage.
To foster transparency and fairness, the legislation outlines several critical measures:
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- Employers are prohibited from making any deductions from tips.
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- A statutory code of practice will guide the fair distribution of tips.
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- Employers must adopt a written policy on tip management and maintain records of how tips are handled.
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- Workers gain the right to request information on their employer’s tipping practices, empowering them to bring credible claims to an Employment Tribunal if necessary.
Looking Ahead: Preparing for the Change
With the draft code of practice currently under consultation until February 22, 2024, updates and further guidance are anticipated in the coming months. This period is crucial for hospitality businesses, including restaurants, bars, and cafes, to align their practices with the impending regulations. Leveraging technologies like Dojo Go will be instrumental in adapting to these changes, offering a streamlined approach to managing and distributing tips in a cashless world.
As the hospitality industry prepares to navigate this significant transition, the focus remains on ensuring a fair and transparent system for tipping. The introduction of the Employment (Allocation of Tips) Act 2023 is not just a legislative change; it’s a stride towards recognizing and valuing the hard work and dedication of hospitality workers across the UK. With solutions like Dojo Go at the forefront, the future of tipping looks brighter, fairer, and more inclusive than ever before.