How are new tipping laws going to change the hospitality industry in the UK?

Whether you’ve had particularly good service in a restaurant, your food has been delicious or you’re simply feeling generous, tipping staff members is a great way of showing your appreciation. Although tipping isn’t as mandatory in UK culture as it is over in the States, it has long been seen as a welcome sign of generosity that could really improve a staff member’s day. 

In America, employees often rely on tips for their livelihood, and with costs soaring in the UK, minimum wage hospitality staff might become just as reliant on tips. There has been a recent trend however, of restaurants taking a cut of tips, and when it was revealed that some places were taking up to 10% it became clear that action had to be taken. Pair this with the knowledge that many diners choose only to tip as a reward in exceptional circumstances and you can understand the crisis that restaurant staff are facing.  On the back of this, former Prime Minister Theresa May announced that restaurants will no longer be allowed to take tips away from staff

The UK’s tipping culture

How will these new laws change the hospitality industry? Well, according to This Is Money, one in 10 Brits don’t tip at all anyway. Those that do tend to leave, on average, 7% of the total bill as a tip instead of the usual 10%. The top reasons for leaving a tip centred around politeness and effort, and one potential reason for not leaving a tip is cited as concern over where the money really goes. 

Because tipping is based on personal judgement, it can vary massively— which can cause great uncertainty for hospitality staff. There’s currently no law in the UK that states all tips have to go to staff. Sadly, this can mean tips don’t always reach the waiting staff intended; one employee in London spoke to the Guardian of how tips were used to cover breakages by staff and customers. They also voiced concern that the sharing-tips practice commonly found in restaurants can be wholly unfair, as an underperforming member of staff who received no direct tips from customers may end up with money from another member of staff putting a lot of effort into giving great customer service. On the flip side, that well-performing member of staff will lose some of the tips given to them by their happy customers. This results in a lack of effort being rewarded, and a great work ethic being reprimanded. 

To share or not to share

A fairer system needs to be put in place to ensure that all staff members are being rewarded for their services. For example, what about the kitchen staff? Should they receive a portion of the tips, given their contributions to a happy customer? Or are tips solely for the customer experience?       

Although tips benefit staff members, one claimed that a rise in basic wage would be much more beneficial. The problem of relying on tips is particularly evident in the US hospitality industry; while tipping is also not compulsory over there, ‘tipped’ employees aren’t covered by the usual minimum wage. Instead, their minimum wage sits at around $2.15 an hour, meaning staff are relying on pulling in good tips. This makes for a huge amount of effort on the waiting staff’s behalf to ensure customers are happy, perhaps, but at the cost of stable income. Then again, the staff tips go to, well, the staff who served that table! And a good thing too, given the recent generosity of one YouTuber who left a $10,000 cash tip for one lucky staff member

Why customers are cautious of card tips 

Many customers seem unsure about where their tips are actually going, especially if they pay over card. So, if customer concern over where the money is going is holding back tips, could this legislation see a rise in amount of people tipping? Potentially — if customers are assured the staff are receiving the tips, they will likely tip, and tip more generously. 

As it stands, cash tips and card tips sometimes end up in different places. Cash tips belong to staff, but card tips belong to the business. Card tips end up in a system known as a tronc, which is then shared out in the wages. But it isn’t uncommon to hear stories of firms retaining part or all of the tronc, which has caused this public distrust of card tips. Customers are savvy to all of this and will often opt to leave a cash tip if they can and decline a card tip when prompted. 

This factor massively impacts tipping mentalities. Brits are notoriously poor tippers; after all, with card payments overtaking cash transactions earlier this year, and the rising popularity and ease of contactless, customers are increasingly likely to not have cash to leave a tip, and feel uncomfortable with leaving a card tip without the certainty that it is going to the staff. In fact, studies show in 2016, only 40% of transactions were cash-based compared to 60% in 2006. A change in the law to assure card tips are the property of staff as much as cash tips could alleviate this problem and see more frequent and larger tips flowing in. 

The etiquette around tipping

Even though these laws have been planned, no action has actually been taken yet. Because of this, we should review how we tip and make sure we understand the protocol of tipping in the UK. Here, we’ve gathered the best advice in regards to tips: 

  • A service charge ≠ a tip — A common misconception, but the service charge added to a bill isn’t a tip to the staff. This can sometimes be requested to be removed from the bill in preference of leaving a cash tip. But the current misconception can cause service charges to reduce the likelihood of customers leaving tips (because they think they already did!) 
  • The general consensus is a 10% tip — Many people are concerned over how much to leave as a tip. Too little might be insulting, for example. Well, generally, 10% of the total bill is a good guideline. 
  • But not every time — Bad service happens, and in such a scenario, it’s perfectly fine to leave no tip. You may also receive exceptional service and want to tip more! 
  • Not just restaurants — Tipping is a practice beyond the dinner table. From a tour guide in a small village to staff at a Durham hotel, many people can benefit from tips from happy customers! Again, the 10% rule is a good guideline, though for cab drivers, it’s common to simply round up the fare and leave the change.