New Tipping Act could make customers pay more as law changes for restaurants and bars
The new legislation, which came into effect on October 1, aims to ensure that the deserving employees who have earned tips, gratuities and service charges receive the money
by Samantha Leathers · ChronicleLiveA new legislation, dubbed the Tipping Act, came into effect on Tuesday, ensuring that hardworking staff receive their rightful share of tips. However, this could significantly change customers' experiences in pubs, restaurants, hairdressers and other businesses.
The law, which was enforced from October 1, regulates how tips are received and distributed by businesses, with the aim to strengthen workers' rights to their tip money. It is estimated to put an additional £200million back into their pockets.
The law stipulates that companies must pass on 100% of all tips, gratuities and service charges to the deserving employees who earned them, without any deductions. If an employer breaches this law by retaining tips or imposing fees, a worker can take their claim to an employment tribunal.
While most employers have already been adhering to this rule as part of an ethical code before it became law, the legislation will clamp down on businesses that don't comply, potentially significantly impacting a customer's experience at certain establishments. Customers probably won't need to alter how they tip at these venues, but may notice a considerable difference in price in the coming months.
The law obliges businesses to align with public demand for transparency and employees' desire for fairness but could result in venues increasing prices, adjusting service charges, or employing other strategies to cover the costs previously met by these tips, reports the Express.
Get all the latest money news and budgeting tips from Chronicle Live with our free newsletter
Especially for smaller businesses that might have relied on service charges to defray miscellaneous expenses like card transaction fees, a significant impact is expected. Sacha Zackariya, the brainchild behind 'Leading Travel and Tourism Retail', shared with the Express that the recent rise in service charges could represent a tactical play by some companies to counterbalance their own escalating costs.
These firms have held consumer prices at an attractive level by compensating for increased costs through a higher service charge, a method that's likely to be thrown into disarray by impending new regulations. He highlighted, "It's worth noting that tipping in many other European countries, such as Spain or Italy, consists of a few coins or a low denomination note."
Additionally, he suggested, "The flat service charge rate should really be lowered so tourists do not feel they are being ripped off from both the inevitable price increase of the food and drinks. Better to just let them know the true price when they look at the menu - not their bill at the end."
Join our WhatsApp communities
ChronicleLive is now on WhatsApp and we want you to join our communities.
We have a number of communities to join, so you can choose which one you want to be part of and we'll send you the latest news direct to your phone. You could even join them all!
To join you need to have WhatsApp on your device. All you need to do is choose which community you want to join, click on the link and press 'join community'.
No one will be able to see who is signed up and no one can send messages except the ChronicleLive team.
We also treat our community members to special offers, promotions, and adverts from us and our partners.
If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'.
If you’re curious, you can read our privacy notice.
Join the ChronicleLive Breaking News and Top Stories community
Join our Court & Crime community
Join the Things to do in Newcastle and the North East community
Join our Northumberland community
Join our County Durham community
Join our Great North Run community