​Government Delays Tipping Law Changes

​Government Delays Tipping Law Changes

Posted by Emma on 22nd Apr 2024

The government has postponed enforcing new regulations dictating the distribution of tips until October 1, 2024. This decision comes alongside the Department for Business and Trade's release of an updated code of practice following consultations with the hospitality sector.

Initially set to take effect on July 1, 2024, the Employment (Allocation of Tips) Act 2023, applicable to England, Scotland, and Wales, aims to ensure equitable distribution of tips, gratuities, and service charges among staff.

The legislation's core principles remain intact, obligating employers to pass on 100% of tips and service charges to employees. Establishments in the hospitality sector must develop written policies outlining how tips are managed and disbursed, ensuring transparent and fair handling of funds.

Employees, including agency workers, must be informed of their entitlement to tips, with funds distributed to them by the end of the following month. The updated code of practice offers further clarity on factors employers can consider when formulating fair tip allocation policies, such as hours worked, role and pay rate, tenure with the employer, and customer intent.

Adaptations regarding agency workers are permissible, provided the resultant tip policies remain fair. Moreover, the updated code assigns agencies legal responsibility for ensuring the full disbursement of tips to workers.

Employers are encouraged to engage their workforce in policy development and acknowledge their fairness perception in disputes. Businesses need help manipulating tip distribution to maintain consistent employee payouts yearly.

Cash tips and digital platform gratuities received directly by staff, without employer involvement, fall outside the bill's scope. Enacted last year, the legislation grants employees the right to request their employer's tipping records every three months, dating back three years. Additionally, staff and agency workers gain the right to pursue tip-related complaints through employment tribunals, potentially resulting in compensation.

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