Have you updated your tips policy?
In one of the pieces of proposed employment law which was carried over from the previous parliament, rules on how tips must be distributed have become more stringent.
The Employment (Allocation of Tips) Act 2023 is now in force, with an accompanying code of practice. If relevant, have you updated your policy and started following the code correctly? Here are the main points.
All tips received by you as employer must now be distributed amongst workers with no deductions made. There is an emphasis in the legislation on fairness and transparency when you are in control of tip allocation. The code includes that you should consult with workers when arriving at your decision.
Not all employees have to receive the same proportion of the tips, but you do have to have a clear and objective set of factors to decide how they are allocated. As you would expect, unlawful discrimination must be avoided.
Other points to adhere to include regularly reviewing your allocation of tips, particularly in line with staff turnover, having a written and accessible tipping policy, and keeping a record of how all qualifying tips are allocated for three years. Employees have rights to view these records.
So what happens if you don’t comply? Well, these new tipping laws are enforceable at an employment tribunal, but before that you would seek to resolve them via internal processes and Acas. If a dispute goes to tribunal and is found in the employee’s favour, the court can name and shame you, as well as order back pay of tips and compensation which applies not only to the complainant but other affected workers who did not complain.
A few final points. The code is detailed but not exhaustive and does expect fairness and transparency to be an overarching principle. Not all tips are included in its scope, particularly cash tips paid directly to workers where no direct control is exerted by you. Non-monetary tips can fall within the scope if you exert control over them – the example of a casino chip being given as a tip is cited.
We can help you get your business compliant with this new legislation or advise on any related disputes. So if you need help, please get in touch.
What’s included in the employment rights changes?
As you may have seen on our blog, or just in the news, we now have a clearer view of which employment rights changes promised by Labour are going ahead.
Postponed but not cancelled are the consolidation of employment status, the “right to switch off” and reviews of the parental and carer’s leave systems. Everything else we expected is proceeding, albeit with consultation periods and a passage through parliament that will last until at least Autumn 2026. Even so, it is important to start planning and budgeting for the following changes now:
- Protection for employers from unfair dismissal claims in the first two years will be removed. The government is consulting on a more limited nine-month probationary period instead but with processes to be followed.
- Workers on zero-hour contracts will be entitled to additional rights including guaranteed hours (if they want to accept them) after a qualifying reference period which is expected to be 12 weeks.
- Flexible working will become the default for all workers. However, the detail we have on this does sound more like a terminology change rather than a practical one. Just as is already the case, you will still have several reasons to reject flexible working for any given role but your refusal must be in writing and be “reasonable” .
- You will have to pay statutory sick pay from day one of an illness, and this is not reclaimable. Moreover, the lower earnings limit of £123 per week to qualify is being removed.
- Parental leave and bereavement leave will become a day one right. Bereavement leave will be extended to cover all workers for all dependants. Currently, it is only for parents.
- Trade union laws will be softened to give trade unions more powers.
- The current collection of enforcement bodies will be amalgamated into one Fair Work Agency.
- The remit of the Low Pay Commission will be expanded to include consideration of the cost of living, and minimum wage age bands will be scrapped.
Naturally, we will keep you posted as the bill progresses through parliament. Our blog on this topic goes into more detail, and we also have an Employment Rights Bill resource centre on our website.
The UK’s work/life imbalance!
According to an international study, the UK scores pretty poorly for work/life balance. Riding high are Spain and France with ratings of 57.92 and 54.89 respectively (Kazakhstan is in third place). The UK languishes in 34th place out of 40 with a rating, coincidently, of 34. India, USA, China, Mexico, Switzerland and Canada were the countries with lower ratings.
Many of the factors are legislative, relating to things like bank holidays and statutory maternity/paternity pay and the like; or economic, such as the cost of living.
Work/life balance is important, not just for your own and your employees’ mental and physical health and relationships, but also for productivity for your business. While you want people working hard for you, overdoing it consistently will result in errors, workplace cultural issues, retention, potential absenteeism due to stress and even burnout. These all become business problems eventually.
While you cannot influence macro factors like the cost of living which would have a material impact on the UK’s ranking, you can control your own employees’ work/life balance positively. In fact, all things being equal, addressing this will give you a strong competitive advantage in the recruitment market.
Managing a multi-generational workforce
A recent report found that Gen Z (18-24) is the hardest to manage due to their attitudes towards authority, levels of professionalism and emotional intelligence. Their adaptability and creativity was praised in the survey, though.
Workers of any generation can pose problems. Different attitudes, different priorities, different skillsets… it can be a challenge for busy SME employers like you. But get it right and you can unlock valuable benefits.
The starting point should always be not to make age-based assumptions. These may not be helpful anyway, but especially as age is a protected characteristic under equality law. As an extension to this, make sure your team are respectful of each other – avoiding inside jokes and banter which may be hurtful, and being inclusive.
With this foundation in place, think how workers of different generations can complement each other. It will vary from person to person (no assumptions, remember), but there will be opportunities for skills to be shared, mentoring and collaboration. Whether it is digital capability or softer skills like resilience and communication, your business is sure to be stronger for it.
I’ll be watching you…
Like any business owner, you want to get good productivity from your employees. Since the pandemic, one challenge to this for many companies has been working from home. What do you lose in terms of business culture? How do you know they are putting in a full shift? How is experience passed down?
Professional services giant PwC is cracking down. Reports say that from 1st January they will monitor staff working locations, requiring them to be in the office or with clients at least three days a week (an increase of 50% from the current two days). It is understood this will be reported back to each employee alongside their chargeable hours.
It is right that business owners should defend productivity, and the key points are to be proportionate and transparent. Let staff know what you do and include it in employment contracts and company handbook. This will all help maintain mutual trust between you and your team.
Health insurance with a difference
Want to jump on the latest trend in employee benefits from the US? Then why not add pet insurance to your package? Purrfect for employees with cats, “fetch”ing for those with dogs, gold dust for workers with goldfish (no, too far!) it could be a novel way to stand out.
We are a nation of animal lovers and 57% of households own a pet; but they do not come cheap, even when they are fit and healthy. So having a pet insurance option available for when they are poorly could be a highly valued and canny way to show your team you care.
