With less than one month to go until the Tipping Act comes into effect on 1 October, RSM UK’s Consumer Outlook shows that the majority of consumers believe tips should go to staff.
RSM UK’s survey of 2,000 consumers found that 80% of consumers think that 100% of tips and service charges should go to staff. Despite this, only a fifth (20%) believe that hospitality staff receive 100% of the tips from customers, which will no longer be permitted under the Employment (Allocation of Tips) Act 2023.
The Act will make it unlawful for businesses to hold back service charges from their employees, ensuring they receive all of the tips they have earned within one month of them being collected. This is expected to benefit two million workers, who are set to take home an estimated £200m more.
Saxon Moseley, head of leisure and hospitality at RSM UK, said:
“It’s encouraging to see consumers believe that hospitality staff should be rewarded for their hard work rather than losing out on their tips, and this new legislation will ensure that happens.
“The leisure and hospitality sector has been plagued by labour shortages, resulting in fierce competition for the very best staff. With the fairer distribution of tips, combined with recent National Minimum Wage increases, this will hopefully help to make the leisure and hospitality industry a more attractive place to work.”
Charlie Barnes, director and head of employment legal services at RSM UK, added:
“The clock is ticking until the new tipping legislation comes into play; businesses are advised not to wait until the 1 October and to begin following the requirements now to avoid getting tripped up. Failure to do so will expose employers to employment claims, requiring them to redistribute the tips fairly to all impacted workers and pay compensation of up to £5,000 per employee.”
