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DB&T: Millions to Take Home More Cash as New Guidance on Tipping Is Published

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The government’s Tipping Act is a step closer to coming into force, as today the Code of Practice is published and laid before Parliament. The new Code of Practice will protect the tips of more than 2 million workers giving them a fair share of the tips received by a company.

  • Tipping Act is a step closer to coming into force as Code of Practice is published and laid before Parliament.
  • New Code of Practice will protect the tips of more than 2 million workers giving them a fair share of the tips received by a company.
  • Workers will be able to view an employer’s tipping policy, their tipping records and will be able to use the Code as evidence in an employment tribunal.

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.

The Code and Practice and consultation response can be found here.

Seeking views on setting up a code of practice on fair and transparent distribution of tips

Government are consulting on the draft statutory code of practice supporting measures in the Employment (Allocation of Tips) Act 2023.

The purpose of the Act is to ensure that all tips are passed on to workers without deductions.

They are creating a statutory code of practice to provide guidance to employers and workers in tipping industries on the fair and transparent allocation and distribution of tips.

They welcome feedback from businesses, workers, customers and other interested parties to ensure this code is as helpful as possible.

Consultation document: code of practice on fair and transparent distribution of tips (HTML version)

Consultation document: code of practice on fair and transparent distribution of tips (PDF version)

Draft code of practice on fair and transparent distribution of tips (HTML version)

Draft code of practice on fair and transparent distribution of tips (PDF version)

Consultation document: code of practice on fair and transparent distribution of tips (HTML version)

Consultation document: code of practice on fair and transparent distribution of tips (PDF version)

Draft code of practice on fair and transparent distribution of tips (HTML version)

Draft code of practice on fair and transparent distribution of tips (PDF version)

Notes

  • 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.

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