The tipping rules, and what they require.

Four obligations sit at the centre of it, and they apply to hospitality among other sectors. None of them are onerous individually, and the one most commonly missed is simply having the policy written down and displayed.

You must clearly display your policy on how cash and card tips, gratuities and service charges are distributed. That includes whether they are shared among staff, how they are shared, and whether any portion of a service charge is distributed. The point is that a customer should be able to see where a tip goes before deciding to leave one.

If you apply a service charge, you need to be clear about whether it reaches staff and how. Describing a charge in a way that suggests it goes to staff when it does not is exactly what the legislation is aimed at. Decide your position, write it down, and display it accurately.

Using tips to make up basic pay is prohibited. Wages are wages and tips are additional. This matters for how you structure pay generally, and it is worth checking that nothing in your arrangements could be read as offsetting one against the other.

New employees are entitled to the policy near the start of employment, so it has to exist in writing rather than as an understanding. Fines can be imposed for non-compliance, and beyond that, tip distribution is one of the most common sources of conflict in a hospitality team. A written policy prevents most of those arguments.