The Employment (Allocation of Tips) Act 2023, which yesterday (2 May) received Royal Assent, will make it unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned.
Through the Act, a new statutory Code of Practice will be developed to provide businesses and staff with advice on how tips should be distributed.
On top of this, workers will receive a new right to request more information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal.
“Fantastic hospitality experiences don’t happen without a huge effort from our teams, both front and back of house, and tips are a generous way of customers showing their gratitude, while providing a welcome boost to employees’ earnings,” says Kate Nicholls, chief executive of UKHospitality.
“We’re pleased to support this new piece of legislation as it comes into law today and look forward to working with Government and other stakeholders on a code of practice that ensures a fair distribution of gratuities amongst all who contribute to providing great hospitality.”
The overhaul of tipping practices is set to benefit more than two million UK workers across the hospitality, leisure and services sectors, according to the Government, with an estimated £200m a year going back into their pockets.
The bill was first brought forward by Conservative MP Dean Russell back in the summer of 2021.
“I am very pleased that my Tips Bill has received Royal Assent,” he says.
“Hard working people working in hospitality in Watford and across the country will be able to retain their tips, knowing that they will now have a fair deal.
“I have always had reservations that some employers kept tips which were earnt by their staff. This new law will stop this immediately and will ensure that the tips are given to the individual staff member, or team.”
The measures are expected to come into force in 2024, following a consultation and secondary legislation.
