The government has recently unveiled a preliminary guide about the forthcoming tipping legislation, which is set to be effective from July 1 2024. This directive, known as the Employment (Allocation of Tips) Act 2023, will be applicable across England, Scotland, and Wales. Its primary objective is to ensure a fair and equitable distribution of staff tips, gratuities, and service charges.
A period for public consultation on this draft code of practice is now open. Hospitality sector businesses and employees can share their input by February 22, 2024.
At a Glance: Key Features of the Bill
- The bill aims to ensure a "fair and transparent distribution" of "qualifying tips," defined as those under the employer's allocation control.
- Cash tips retained by workers without employer intervention are outside the bill's scope.
- Employers must adopt a fair principle in distributing funds among all staff, including permanent, agency, and zero-hours contract workers. Equal distribution is not mandatory, but the process should be free from discrimination and based on clear criteria like job role and customer intent.
- Regular staff consultation on tip distribution is mandated, influencing employment tribunal rulings in dispute cases.
- Employers can incorporate tips into the next payroll or use a 'tronc' system, managed internally or externally, for tip allocation.
- All tips must be shared within a month after their receipt.
- Employers must document their tip acceptance and distribution policy, ensuring fairness in fund management.
- All employees, including agency staff, should know their tip entitlements.
- Policies must be communicated to staff, mainly when changes occur.
- A three-year record of tip receipt and allocation is mandatory.
Rights and Recourse
- Staff can request access to tipping records quarterly, going back up to three years.
- Tip complaints can be escalated to an employment tribunal, potentially leading to compensation.
Click here to view the complete guidelines and participate in the consultation.
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