Tipping changes incoming on 1 July

A new law on how tips are distributed to employees will come into effect from 1 July. The Employment (Allocation of Tips) Act 2023 makes it unlawful for hospitality businesses to keep any service charges earned by their employees. As a result, 100% of the tips your team receive need to be passed back to them. However, it doesn’t mean they need to be distributed equally between each of your team members. Role types, performance and length of time served may all affect the percentage of tips an employee gets. These factors must be fair, reasonable and clearly set out in a tips policy. To get ahead, chat with your team to figure out the best approach for everyone.