Azets Aberdeen prepares North East Scotland businesses for new tipping legislation – Aberdeen Business News

Azets Aberdeen, a prominent provider of financial and strategic advisory services, is ensuring that companies in the North East of Scotland are ready for an upcoming policy change affecting the handling of tips and service charges.

Tipping is a common practice in industries such as restaurants, hotels, and bars, significantly supplementing the income of service staff.

As Aberdeen gears up for ‘Aberdeen Restaurant Weeks’, this serves as a timely reminder for local hospitality venues to comply with new legal requirements taking effect in October.

Starting from 1 October 2024, the Employment (Allocation of Tips) Act 2023 will be implemented to safeguard employees’ and workers’ tips and service charges across all sectors.

The new legislation prohibits employers from withholding any tips and mandates businesses to ensure fairness and transparency in distributing tips among workers.

The Act aims to enhance fairness for workers by guaranteeing that tips given for good service and hard work are received by the intended recipients.

AAzets Aberdeen Head of Tax Frazer Nicol said: “Tipping is a customary practice within the hospitality industry.

“The new Act coming into force will be welcomed by employees, especially those working in the vast array of hospitality outlets within the area.

“We want to ensure businesses in our local community are well–prepared for the change ensuring they can look after their staff’s interest and maintain compliance. 

“Under the new Act, employers must, as a minimum, allocate tips fairly and transparently, have a written policy on how tips are allocated to workers and distribute 100% of tips to workers by the end of the month that they were received.

“Failure to comply with the Act can result in fines, which we want businesses to avoid.”

If a worker believes that the allocation of tips and gratuities is unfair or feels discriminated against, they can file a claim with the employment tribunal.

A successful claim could result in compensation of up to £5,000. As this change falls under employment law, the responsibility lies solely with the employer.

This means the risk cannot be transferred to a third party, such as a Troncmaster, who is appointed by a business to manage the distribution of tips to staff through a tronc scheme.

A tronc scheme is a payment arrangement that allows hospitality and leisure businesses to distribute tips and service charges from customers to staff equitably.

Frazer continued: “We are welcoming any business that may have concerns about the new Act to get in touch with us at Azets. 

“We have a dedicated Employer Solutions team available to help guide businesses through the new legislation, assist with documenting the written policy, help to communicate any changes with employees and, if required, we can assist with the implementation of a Tronc scheme. 

“We are committed to helping businesses navigate complex market conditions and achieve sustainable growth.”