Millions of UK workers are set to take home an estimated £200
million more of their hard-earned cash, as landmark legislation
on tipping took a step towards coming into force.
Today, Government introduced the Code of Practice on the fair and
transparent distribution of tips that will have legal effect
under the Employment (Allocation of Tips) Act 2023.
The updated Code of Practice will be statutory and have legal
effect, meaning it can be introduced as evidence in an employment
tribunal.
The Act and secondary legislation make it unlawful for businesses
to hold back service charges from their employees, ensuring staff
receive all of the tips they have earned. The measures are
expected to come into force on 1st October 2024, once they have
been approved by Parliament.
Alongside the updated Code of Practice, we have also published
the formal Government response to the public consultation which
sets out the feedback received during the consultation, the
Government's response and next steps.
Many hospitality workers rely on tips to top up their pay and are
often left powerless if businesses don't pass on service charges
from customers to their staff.
This overhaul of tipping practices is set to benefit more than 2
million UK workers across the hospitality, leisure and services
sectors helping to ease cost of living pressures and give them
peace of mind that they will keep their hard-earned money.
Business and Trade Minister Kevin Hollinrake
said:
It is not right for employers to withhold tips from their
hard-working employees.
Whether you are cutting hair or pulling a pint, this government's
legislation which will protect the tips of workers and give
consumers confidence that when they leave a tip, it goes to the
hardworking members of staff.
The secondary legislation laid today reinforces our commitment to
legally protecting our low paid workers and ensuring a fair day's
pay for a fair day's work.
CEO of Tipjar, Ben Thomas said:
Hospitality and service industries are part of the fabric of our
culture and a cornerstone of our economy.
We are honoured to have consulted with the Department of Business
and Trade as they have developed this important Code of Practice
clarifying employers' responsibilities as they pass tips to their
hard-working teams.
As a business that exists to help employers distribute tips on
the same principles of fairness and transparency, we are
confident that this Act will support millions of tipped workers
across the UK, and level the playing field for businesses across
these sectors. We're excited to support employers in leveraging
the opportunities this will present, as we build a more fair and
transparent future.
These measures follow a series of wins for workers after a record
National Minimum Wage uplift and boosts to employment protections
for parents and unpaid carers, as well as giving all employees
easier access to flexible working.
Notes to Editors
- The Code and Practice and consultation response can be found
here:
https://www.gov.uk/government/consultations/distributing-tips-fairly-draft-statutory-code-of-practice
- The Government strongly believes that tips, gratuities and
service charges should go to workers, rather than employers. Tips
are intended to reward staff for hard work and good service, and
they should be distributed fairly and transparently. The
Government has made this clear since announcing its intention to
legislate on this and confirming its support of this Private
Members' Bill.
- The new measures on tipping are expected to come into force
on 01 October, once parliamentary approval has been secured. The
Government has delayed this implementation due to extenuating
circumstances. We remain committed to protecting workers' rights,
and we also wish to ensure employers have enough time to prepare.
- We encourage all businesses to follow the new requirements
immediately, before they come into legal effect.
- If someone is concerned that they're not being paid the
correct wage, they should speak to their employer. If the problem
is not resolved, they can contact Acas (the Advisory,
Conciliation and Arbitration Service) by phoning 0300 123 1122,
- These new measures will apply to England, Scotland and Wales.
Employment policy is devolved to Northern Ireland.
- These new measures apply to all industries.
- Tips cannot be used to count towards minimum wage pay – this
has been the case since 2009.
