‘Tipping’ guidance for employers

By Napthens

03 Apr 2019

Website

Businesses in the leisure sector should understand how tips should be distributed to staff, an expert has warned.

Oliver McCann, Employment & HR partner at regional law firm Napthens, warns that businesses are facing increased pressure from workers and customers to make sure their distribution of tips is favourable for staff.

These tips or gratuities are commonly given as a reward for good service in the hospitality, leisure and service sectors. Workers may receive them directly from a customer, within a pay packet, or pooled and shared between all staff.

A government consultation was launched into concerns around the treatment and transparency of tips, and in recent months a response called The Good Work Plan was unveiled, confirming new legislation will be introduced.

In the meantime, Oliver warns that it is vital to understand how they should be distributed – ideally through a written policy when a staff member is first employed.

He explained: “Legally, if a worker receives a tip directly it is theirs not the employers, and in theory should be declared to HMRC.

“Card payments are often different and become property of the employer, and there is no legal duty for them to hand them over to staff but in practice many do and indeed a business’ reputation could be damaged if they didn’t.

“It’s also important for employers to understand the relationship between tips and minimum wage – since 2009 employers have been prevented from using tips to meet their minimum wage obligations, so workers must receive them on top of their basic pay.

“Failure to comply can lead to an HMRC investigation and ultimately both financial and reputational damage.

“Likewise, workers have the right to complain if there has been an unlawful deduction from wages – it will only be allowed if it is required by law or permitted by a contract or by written consent.”

Oliver gave his top tips for employers:

Be clear about how tips are distributed Do not use tips to make up national minimum wage Do not make unlawful deductions from wages Remember that you may need to pay whilst absent from work (i.e. holidays, sick leave, parental leave etc.) if the calculation is based on the employee’s average remuneration.

Enjoyed this? Read more from Napthens

Latest news

1

Airframe Designs completes groundbreaking R&D project in polymer additive manufacturing Breakthrough at Airframe Designs

Airframe Designs completes groundbreaking R&D project in polymer additive manufacturing

03 Mar 2025

2

Boost your management skills with workshops UCLan workshops

Boost your management skills with workshops

25 Feb 2025

3

Lancashire Growth Plan to be launched at Convention of the North Cllr Phillippa Williamson With A Convention Branded Minibus

Lancashire Growth Plan to be launched at Convention of the North

25 Feb 2025

4

AMS Neve makes waves in California, demonstrating products to Stevie Wonder Stevie Wonder And His Team Receiving A Demo Of The Genesys G3D Console By Joe Heaton Of AMS Neve In California Press

AMS Neve makes waves in California, demonstrating products to Stevie Wonder

25 Feb 2025

5

Partners at law firm Harrison Drury complete management buyout John Chesworth and Simon England

Partners at law firm Harrison Drury complete management buyout

25 Feb 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV121 March/April Launch Event
121 Lancashire Business View Magazine Launch
Networking
20 Mar 2025

LBV121 March/April Launch Event

The Whitakers Museum, Rossendale, BB4 6RE

08:30 - 10:30

Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Post Employee Ownership Trust: What's the story?
LBV image.jpg.jpg
LBV Hub Seminars
04 Mar 2025 - 04 Mar 2025

Post Employee Ownership Trust: What's the story?

Brabners, Preston, PR5 6AW

11:00 - 12:30

Better People Management Workshop
LBV Hub Seminars
05 Mar 2025 - 05 Mar 2025

Better People Management Workshop

Strawberry Fields Digital Hub, Chorley, PR7 1PQ

10:00 - 15:30

North West (Preston) Finance Leaders Networking Event
MHA-BTI Logo_black (002).jpg.jpg
LBV Hub Networking
05 Mar 2025

North West (Preston) Finance Leaders Networking Event

Farington Lodge Hotel, Stanifield Lane Farington, Preston, PR25 4QR

08:00 - 10:00

Better People Management Workshop - March 5
UCLan Better Management Workshop
LBV Hub Seminars
05 Mar 2025

Better People Management Workshop - March 5

Strawberry Fields Digital Hub, Chorley, PR7 1PQ

10:00 - 15:30

Better People Management Workshop
UCLAN event
LBV Hub Seminars
06 Mar 2025 - 06 Mar 2025

Better People Management Workshop

The Oaks Hotel, Colne Road, Burnley, BB10 2LF

10:00 - 15:30

The Employer’s Toolkit: Payroll, Employment Law, and Benefits
Copy of am alert (2).jpg.jpg
LBV Hub Seminars
07 Mar 2025 - 07 Mar 2025

The Employer’s Toolkit: Payroll, Employment Law, and Benefits

Village Hotel Bury, Bury, BL9 7BQ

09:00 - 12:00

Fertility and IVF Support in the workplace
Supporting Women's Health in Your Teams A Path to Success-2.png.png
LBV Hub Webinar
07 Mar 2025 - 07 Mar 2025

Fertility and IVF Support in the workplace

* , Online , *

12:30 - 13:30

Red Rose Awards 2025
Red Rose Awards 2025
Awards
13 Mar 2025

Red Rose Awards 2025

Winter Gardens Blackpool

18:00 - 11:59

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin