GolfHR expert Carolyne Wahlen provides an update after a new law on tips and gratuities came into force.
A new law on tips and gratuities came into force in October last year and you may be required to act now.
As responsible HR providers, we’ve been busy making sure our clients are aware of the law and how they can comply, using webinars, fact sheets, Q&A sessions, and more.
In a recent conversation with a client’s accountant, it became clear that a lot of businesses still aren’t on top of the law.
They wanted to chat because we’d told one of our mutual clients that they couldn’t continue to pay out their tronc scheme as a Christmas bonus (i.e. as an additional, supplementary extra that wasn’t necessarily required to be handed over to employees).
The accountants felt that the client in question could continue to pay out their tronc scheme as a Christmas bonus. Spoiler alert, they were wrong.
It quickly became clear that they really had no idea about the new law, when they asked us this question:
“Is it an actual law, or just best practice?”
For the avoidance of doubt, it’s the FORMER.
If you’re in a similar boat, and you weren’t aware that the law has totally changed, here’s the actual, legal guidance you need – as of 1 October 2024:
– ALL tips, service charges and gratuities have to be passed on 100% to the staff, no administration charges
– The staff HAVE to receive this money at the latest at the end of the following month.
– You cannot keep a contribution made by members with their subs in April in order to pay it out as the Christmas bonus. That is now illegal. You would have to pay it out in May.
– Electronic AND cash tips should be included
– You NEED to have a clear and understandable policy for your staff on tips, and issue it to all of them in writing.
– If you have a tronc scheme which only pays out once a year, that will now potentially be ILLEGAL.
If that sounds like a lot of hard work and you’re wondering how on earth you’re going to make it happen, you’re in luck – we’ve put together everything you need, with documents, templates and guidance that’ll make it easy for you to transition.
For the next week, the investment for our Tip Policy Pack is just £95 + VAT, and once you’ve got the docs, you can take the necessary actions in less than an hour.
Don’t do anything and you risk a £5,000 fine per employee, so it really is imperative we get this sorted for you ASAP. If you’re keen, just email [email protected] saying ‘yes please’ and we’ll be in touch to get this sorted.
Carolyne Wahlen, GolfHR
