Legislation addresses equality imbalances in hospitality, says expert

The recently-announced changes to tipping practices, which are a legal requirement from 1st July 2024, are making it the law that all tips and gratuities must be paid to the rightful staff that earned them. Innovative Tronc brand Grtfl is praising these changes as it bids to promote fairness and equality within the hospitality industry.

Tronc system Grtfl introduces the hospitality industry to a transparent and automated process of distributing tips among the staff who earned them to ensure compliance with regulations. The Grtfl app allows employees to see their tips instantly, reducing shift latency where staff have to wait weeks to gain knowledge on their earnings. Grtfl’s transparent platform aims to introduce more trust between hospitality businesses and customers for the financial benefit of workers, as many customers are unsure that their tip will go directly to the staff who served them.

Mason Potter, Founder of Grtfl, says: “Hospitality is the third largest employer in the UK, with approximately 3.5 million people working in the sector. Many people rely on jobs within hospitality for their livelihoods and therefore the industry must continue to make changes to support workers.

“With the changes to regulations meaning an estimated £200 million a year will go back into the pockets of hard-working staff, the regulations are addressing the problematic practices of distributing tips within the hospitality industry.”

The new legislation marks the beginning of a fairer and more equal era for the hospitality industry as it will be a legal requirement from this summer to have a written policy on how tips are handled, and to have this policy available to all workers. Employers must keep a record of all tips, how they’re shared among workers, and must let workers see this information on request. With almost two-thirds (62%) of hospitality workers stating that they think the hospitality sector does not take care of its employees, the legislation to protect tips and gratuities for staff is much needed.

For many hospitality businesses, the changes in regulations will introduce additional admin which owners may not have the capacity to complete. Because of this, Mason advises hospitality businesses to install an automated Tronc system if tipping distribution has been conducted manually thus far.

“An automated process maximises compliance with regulations as it reduces the presence of human error, a risk in manual practices”, says Mason, “with employees entitled to take an employer to a tribunal to settle any disputes over tip distribution and a potential fine in place if found to be at fault, employers have even more of a reason to ensure compliance to avoid legal difficulties. A Tronc system can be integrated into an existing payroll for ease so there is no need to totally replace a system.

“As an automated background process, an automated Tronc platform frees up time for owners and management teams. When done right, it can be a very powerful tool to motivate team members to go the extra mile.”

A recent survey found that 55% of hospitality business owners were experiencing staff shortages. Of these owners, 43% were either concerned or very concerned about staff shortages in the sector.

“Retaining talent within the hospitality industry is difficult and research suggests that around 30% of hospitality workers leave in the first 90 days”, says Mason, “With some businesses reported to be operating on significantly reduced opening hours, staff shortage issues can have a destroying effect on smaller hospitality businesses.

“Attracting and retaining great talent to fill roles is only half of the battle, as staff retention is also an issue within the industry. As the new legislation makes it a legal requirement to distribute tips fairly, the hope is this will bring significant change to the length of time staff spend working within a hospitality business. In turn, this decreases the time owners must spend training new staff.”