Businesses need to retain the flexibility to invest in their teams and recognise great service in any review of the rules on tips. Those rules need updating and strengthening, with the emphasis on clarity and transparency, but new legislation is not necessary to deliver best and fair practice. That’s the conclusions from an ALMR survey of members on tipping practice presented in a meeting with Government earlier this week.
The ALMR survey highlights the increased prevalence of tipping across the hospitality sector – including pubs, clubs and bars as well as casual dining restaurants – with over 85% of companies responding having a written tipping policy which mirrors the existing Government Code of Practice and all of them redistributing tips to staff in a variety of different ways.
Discussing the findings, ALMR Chief Executive Kate Nicholls said: “it is important to remember that the Government has issued a call for evidence on this issue and so it is vitally important that we have hard facts and detailed information to take to them. With 1 in 5 of our members’ outlets now drawn from casual dining, this is an area where we have a lot of information to help Ministers make a decision on next steps and to understand the implications on investment, recruitment and pay. This is a complex issue and clarity and flexibility will be key to getting it right.
“There is appetite for practical reform to update the Code of Practice to reflect the increased use of credit cards and the changing consumer and employment culture – and over two thirds of our members were supportive of proposals to strengthen the Code. But we have not found any evidence which suggests new regulation is required to deliver that.
“Businesses are aware of their responsibilities regarding tipping and we should not forget that they are carrying out their obligation to ensure that tax properly collected and performing a vital role. Any revisions by made by the Government to tipping guidelines should make this point clear.
“In our meeting with officials at the Department for Business, Innovation and Skills, we have emphasised the need to ensure flexibility for businesses and to ensure that there is greater transparency for our teams and our guests. In a competitive market place, that will deliver best practice more effectively than legislation.
“A one size fits all approach will fail to recognise the pressures that small businesses in particular are facing. Additional costs to businesses already facing tightening margins have the potential to disrupt investment and future job creation. We have therefore updated our draft policy on tipping and will continue to discuss issues of best practice with our members.”