Hospitality employers are hurriedly changing their policies on tips after belatedly realising that they could fall foul of the agency workers regulations introduced this month, lawyers say.
Pubs, bars, restaurants and hotels typically pool the tips given to staff, either in cash or as part of a service charge, and distribute them between employees. But many have traditionally excluded temp workers from the arrangement and this will have to change for anybody staying more than 12 weeks with one employer, warned Jim Lister, head of employment at law firm Pannone.
“We have received enquiries from leisure companies who are unclear about the new regulations,” said Lister. “I would urge those that operate a shared tip system to review their policies to include agency workers with more than 12 weeks’ service - or they could find themselves falling foul of the new regulations.”
Under the regulations, the definition of ‘pay’ for agency workers includes any payment or reward for work which is directly attributable to the quality or quantity of their work. Tips come under this definition, whether or not they are discretionary or based on collection of a compulsory service charge, the firm says.
It is common practice for companies to divide up tips between workers based on the number of hours they work. This method could easily be used to share the tips with temporary staff even if they are not undertaking as many hours as permanent workers, says Lister.
Prem Paritosh
PGDM -3rd
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