Reflecting On The First 7 Days Of The Fair Tips Act
Yesterday, October 1st, 2024, marked a significant moment for everyone in the hospitality industry: the Employment Allocation of Tips Act officially came into effect. At TiPJAR, we’ve been passionate about fairness and transparency since day one, so seeing this legislation become a reality feels like a huge victory, not just for us but for all the hardworking staff out there who rely on tips.
Here’s what’s been going on at TiPJAR in the last 7 days and why we’re so excited about this change.
A Proud Moment for the Industry
When we started TiPJAR in 2019, we set out to solve one problem: making sure tips went directly to the people who earned them, with no funny business. We’ve always believed that staff should get 100% of their tips, and it’s incredibly rewarding to see this principle become law across the entire industry.
This new legislation means businesses can no longer pocket a portion of workers’ tips. It’s the kind of change that will make a real difference to the lives of so many people, and we’re proud to have been advocates for this shift from the beginning. We’ve been totally humbled by the entire country’s response to the change so far, and can’t wait to see how it affects our industry long-term.
Changes to Our Product Fees & a CAll To Action For Card COMPANIES
As part of this shift, we’ve made some changes to how some of our products work. One of our core values has always been ensuring TiPJAR is completely free for staff to use. To keep it that way, we’ve updated how fees are charged on some of our products. For example, with our Tap to Tip and PDQ solutions, we’re now making it mandatory for customers to cover transaction fees, rather than leaving it optional.
This means that when someone leaves a tip, 100% of it goes to the team, every time! It’s a small but important step in making sure everything is fair and transparent. And while these changes are new, they’ve been really well received by both staff and customers, which is a big win for everyone. You can see a breakdown of exactly how these fees are charged, by product here.
But here’s the thing—while we’ve found ways to make sure staff aren’t paying these fees, there’s a bigger issue at play. Card issuers, like Mastercard and Visa, still charge fees on tips, and we believe that needs to change. These fees don’t serve the staff, and they don’t reflect the purpose of a tip. After all, a tip is a reward for great service—it’s meant for the person who served you, not for financial intermediaries to take a slice.
We strongly believe that card issuers should reconsider and remove fees on tips. The industry has taken a massive step forward with this new law, but it would be even better if companies like Mastercard and Visa followed suit by waiving fees on these transactions. We’re committed to doing everything we can to drive those costs down, but a wider change in the system would make a huge difference to everyone in the hospitality industry.
Last-Minute Scramble by Some Operators
What’s surprised us the most over the past week is just how many businesses left their compliance to the last minute. While we’ve been working with operators for months to prepare for the new rules, many businesses only started scrambling to get ready in the final days before the deadline.
We’ve been taking on a lot of new clients, helping them get compliant quickly. It’s great to see businesses doing the right thing—even if they’re a bit late to the party—and we’re happy to help them get there! If you need some guidance on how to approach the legislation, feel free to get in touch!
Collaborating with the Government
One of the things we’re most proud of as a business is how closely we worked with the Department for Business and Trade (DBT) on the guidance for this legislation. Our CEO, Ben, was even quoted on the government’s official page about the new law, which was a fantastic moment for us as a team. You can read more about that here.
Being able to contribute to something so positive for the industry has been an incredibly rewarding experience for all of us at TiPJAR.
Staying True to Our Values
It’s no secret that some businesses are already trying to bend the rules of the new legislation. We’ve seen a few instances of troncmasters allowing several practices that clearly go against the spirit of the Act.
At TiPJAR, we’ve always put staff first, and that’s not going to change. We’ll continue to work closely with operators to ensure they’re compliant, but we’ll never compromise our core value of making sure tips go straight to the people who deserve them with total fairness and transparency.
A Huge Thanks for All the Support
We’ve been blown away by the warm reception we’ve received over the past few days. From new clients to media outlets, the response has been incredible. We were even featured on ITV News last night, which you can check out [here](https://www.itv.com/news/2024-10-01/where-will-your-tip-go-new-law-stops-businesses-pocketing-staff
We also want to take this opportunity to thank our partners, clients, and news outlets for amplifying our message of fairness and transparency. The support has been overwhelming, and we’re excited to continue playing our part in this industry transformation.
Looking Forward
The Employment Allocation of Tips Act is just the beginning of a more equitable tipping culture in the UK. At TiPJAR, we’re committed to staying at the forefront of this change, continually improving our products and ensuring that tipping remains a transparent, fair, and positive experience for everyone involved.
If you’re a business looking for help in staying compliant, we’re here to support you. Together, let’s create a better future for all workers.