- New legislation to make it unlawful for employers to withhold
tips from staff
- it means customers will know for certain that all tips will
go to hard-working employees, who will take home more money
- the Tipping Bill will benefit more than 2 million workers
and, for the first time, will give them the right to see an
employer’s tipping record
Millions of UK workers will be able take home more of their
hard-earned cash under new legislation, backed by the government
today (Friday 15 July), banning employers from withholding tips
from their staff.
Despite most hospitality workers – many of whom are earning the
National Minimum Wage - relying on tips to top up their pay,
there are still sadly too many businesses who shamefully fail to
pass on service charges from customers to their staff.
The Employment (Allocation of Tips) Bill, introduced by and backed by the
government, will ensure that all tips go to staff by making it
unlawful for businesses to hold back well-earned service charges
from their employees.
This overhaul of tipping practices is set to benefit more than 2
million UK workers across the hospitality, leisure and services
sectors – who tend to reply on tips the most – and will help to
ease pressures caused by global inflation and an increase to the
cost of living.
Business Minister said:
At a time when people are feeling the squeeze with rising costs,
it is simply not right that employers are withholding tips from
their hard-working employees.
Whether you are pulling pints or greeting guests, today’s reforms
will ensure that staff receive a fair day’s pay for a fair day’s
work – and it means customers can be confident their money is
going to those who deserve it.
I particularly want to tip my hat to the work of and all the campaigners
who have helped make the Tipping Bill a reality.
Through the Bill, 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.
Dean Russell, Conservative MP for Watford,
said:
I am delighted that my Tips Bill has passed second reading in
Parliament. It is fantastic that we are on track to securing a
fair deal for millions of people working in hospitality across
the country.
It has always felt wrong that some employers have retained tips
intended for their staff. This new legislation will halt this
practice, particularly given the current challenges around the
cost of living. I would like to thank all of the businesses and
stakeholders that have got in touch to voice their support.
The move towards a cashless society has exacerbated the problem
of companies keeping card tip payments for themselves, and
today’s measures, once in law, will ban that practice.
UK Hospitality Chief Executive, Kate Nicholls,
said:
Tips and service charges provide a significant and welcome boost
to hospitality employees’ take-home cash. So we’re delighted to
see this proposed legislation recommend that employers can set a
fair distribution policy for staff, meaning they all benefit.
This should also reassure prospective hospitality sector workers
at a time when the industry is seeking to fill vacancies.
Today’s reforms follow a range of government action to support
people with the cost of living and help those on lower incomes
keep more of what they earn. Most notably, earlier this year the
government increased the National Living Wage to £9.50 per hour –
equivalent to an extra £1,000 a year for a full-time worker –
with a full campaign which encouraged workers to check their pay.
In addition, the government recently announced a widening of the
ban on exclusivity clauses, giving the lowest paid workers
flexibility to top up their pay and work multiple jobs if they
wish.
The reforms come at a time when there are more employees on
payrolls than ever before – and unemployment has reached an
all-time low.
