Tipping Bill Ensures Fair Allocation of Tips

Tipping Bill Ensures Fair Allocation of Tips

A change is coming for those working in catering and hospitality roles. A new tipping bill called ‘The Employment (Allocation of Tips) Act 2023’ has received Royal Assent (which means that it’s become law). The new bill makes it unlawful for employers to keep tips, gratuities and service charges paid by customers from workers. The official date that the legislation will come into effect is expected to be announced sometime this year. 

What changes will the new tipping bill bring?

  • Fair distribution of tips: All tips received from an employer’s customers will need to be fairly distributed amongst workers at a place of business – this includes both non-public facing and public-facing staff. Tips that are distributed would include employer-received tips (e.g. paid by a customer as part of payment) as well as worker-received tips (e.g. tips given to workers by customers directly).

  • How tips are paid: tips would be paid to workers in cash or deposited in their bank accounts along with their usual pay by no later than the end of the month, following the month in which the tip was paid by the customer. However, employers may have the option to pay a ‘qualifying’ tip instead of money, in the form of a stamp, voucher, token or similar which is of a fixed monetary value, and is capable of being exchanged for money, goods or services.

  • New worker rights and updated legislation: The current ‘Employment Rights Act 1996’ will be updated to reflect the new changes, and a Code of Practice is being developed by the government and other stakeholders to help guide employers and workers on how to implement the new laws. Employers also won’t be allowed to make any unauthorised deductions from tips, such as costs stemming from breakages or accidents caused by a worker during a shift. 
Two people discussing worker rights

Workers will receive new rights that entitle them to request information relating to their employer’s tipping records if they feel that they haven’t received a fair share of tips. If workers have any grievances with their employer about tip allocations, they’ll be able to take their grievances to employment tribunals.

If an employment tribunal finds an employer’s tipping practices are unlawful, workers can receive compensation up to £5,000 – this will vary on a case-by-case basis. 

Tips are just one part of what makes working in catering and hospitality a great job and career, and this parliamentary bill will ensure that workers receive their fair share of tips from their employer no matter where they work within the UK. It will also give those typically working in non-public facing roles such as Chefs or Cleaners the opportunity to earn customer tips for the first time. Great hospitality experiences don’t happen without huge efforts from front and back of house teams, and gratuities are a way for customers to show their appreciation. 

If you’re a Blue Arrow candidate and have any questions or concerns about the new tipping bill legislation coming into effect, contact your Blue Arrow consultant for advice.