News & Insights: Allocation of Tips & Minimum wage
These changes in 2024 will have a big impact for HospitalityIn 2024 we will have two big changes happening, this will affect Hospitality and you will need to start planning now. The biggest change is the allocation of tips, as this will affect agency workers who are paid on a agency PAYE and your own casual staff. Many companies have moved towards a fixed allocation of service charge, based over a month, this will affect this and could mean it based on a day or hourly rate.
In addition to this, minimum wage will be going up as well from 2024, which was announced at the conservative party conference in October 2023, this will happen from April 2024.
Minimum wage (living wage)
It was announced, for over 21 year olds, this will now be at £11.44 per hour. This means if someone works 40 hours, the wage is £23,795. A 45 hr contract is £26,769 and a 48 hr contract is £28,554. This is basic wage excluding tips and service.
hours | Annual | |
---|---|---|
over 21 yr old | 37hrs | £22,010 |
40hrs | £23,795 | |
45hrs | £26,769 | |
48hrs | £28,554 |
There are things you will need to start to do, this will include:
- budget for the difference
- review the hours you require your team, do they all need to be on a 48 hr week contract or can some be on 40 hours or 45 hours
- review the opening hours of your business, if you have a quite day, do you require to be open or can open later?
- review technology, can you use technology to reduce manual labour, which in turn, can help staff feel happier and also it means they can work 40 hours and not 48 hours
The rates for under 21 year olds, at the time writing this has not been released yet.
NMW Rate | Increase in pence | |
---|---|---|
National Living Wage (21 and over) | £11.44 | £1.02 |
18-20 Year Old Rate | £8.60 | £1.11 |
16-17 Year Old Rate | £6.40 | £1.12 |
Apprentice Rate | £6.40 | £1.12 |
Allocation of tips:
The Employment Allocation of Tips Act 2023 received royal assent earlier this year and is expected to come into force in 2024. This new law will make it illegal for companies in the UK to take a portion of the service charge or tips from their staff who are employed on PAYE by restaurants or hotels.
For years, there have been reports about how some restaurant and hotel chains were pocketing a portion of the service charge or tips left for their staff by customers. This act will put an end to this unethical practice, ensuring that all tips are fairly distributed among the employees who provided the service.
The act will require companies to be transparent about their tipping and service charge policies and inform customers if any portion is kept by the business. It will also give employees the right to challenge any decision made by their employer on the allocation of tips. Further, it will ensure that the tips are not used to make up the minimum wage, which will have a significant impact on the lives of low-wage employees in the hospitality industry.
This move comes as a great relief to many workers in the hospitality industry, especially those who rely on tips as a significant part of their income. It will help to ensure that their hard work is rewarded and that their employers cannot take advantage of them by keeping a portion of their tips.
Overall, the Employment Allocation of Tips Act 2023 is a significant development for employees in the hospitality industry. It will provide greater transparency and fairness in the distribution of tips and service charge, making it a win for both workers and customers. This is for workers employed direct by a Restaurant, Hotel or Bar on PAYE either on a Full time, part time or casual contract.
HtE Recruitment News & Insights
This news and insights page has been written for HTE Recruitment using a number of methods & edited by HTE Recruitment.
Other Hospitality info posts:
How to reduce Restaurant No Shows – News & Insights
How to handle Restaurant no shows So many of our clients talk about the issue of people not showing up for Restaurant reservations. This is a major issue and has gotten worse over the years. We have seen a move towards deposits and ticketing so here are a few thoughts...
Could the budget help English sparkling wine sales – News & Insights
Could Sparkling wine sales go up from 2023? As we all still look at the positive and negative changes from the November Budget, one area does stand out. This is the reduction in tax on English Sparkling wine. Our Recruiter team got treated for our 10th birthday to a...
How to navigate the Chef pay wages for your business – News & Insights
How to navigate the chef wage increases. Over the past 9 months, chef wages have increased. When reviewing your chef wages to attract the talent, it is worth looking at the whole picture. From our recent chats with chefs, wages and hours are the most important two...
Changes to Food Allergy Laws for Food on the Go sector – News & Insights
From October 2021 new laws come in for the Food to Go sector (UK Food Information Amendment)Natasha’s Law, an overview. Starting in October, many food retailers and Cafe’s will be implementing changes known as the UK Food Information Amendment, this was brought about...
What is going on with the UK Chef shortage – News & Insights
Why is the UK facing a massive Chef shortage since the reopening?It has been all over the news regarding the shortage within the Chef market. We have been trading for 15 years and we have insights of the market. Over the past 15 years it has not been like this in the...
IR35 update for Contractors and Relief workers in the UK – News & Insights
What is IR35?Get ready for April 2021. We have created this page as many clients have been asking us about this, as they keep hearing this in the media and not sure what it is. We have created this page to answer various random questions. IR35 is shorthand for the...
Great British Menu 2021 – News & Insights
Great British Menu 2021Here is the list of the Chefs on this years Great British menu, starting March 24th 2021. The program is split into regions the Chefs come from / born in. Central Sabrina Gidda, AllBright, London Shannon Johnson, Hicce, London Stuart Collins,...
How to reopen your Restaurant after Lockdown – News & Insights
Reopening your businessThe past year has been hard for ever business, the Hospitality & Catering sector has been one of the worse hit sectors. With the roadmap now set out, it is now time to start planning your next steps. Menu's Start thinking about the menu you...
Interview Questions for Chefs
Welcome to our Chef interview tips page General interview tips video, worth a watch and below is sample questions for Chef interviews and ways a chef is interviewed. The team here at HtE Recruitment are here to help you with you're chef interview...
Contact us
3000 Aviator Way
Airport City Business Park
Manchester
M22 5TG
Call us:
0161 300 7862 (Northern Office)*
0203 542 6103 (Southern Office)*
Email: [email protected]