The Employment (Allocation of Tips) Act 2023 (Commencement No. 2) Regulations 2024 SI 2024/829 and the Employment (Allocation of Tips) Act 2023 (Code of Practice on Fair and Transparent Distribution of Tips) Regulations 2024 SI 2024/831 were laid before Parliament yesterday and will bring the Act and the Code of Practice into force later this year.
The new law and accompanying Code of Practice will come into force on 1st October 2024. Here are the key features of the new Act:
- Full distribution to workers: employers are now required to ensure that all tips are passed on to workers in full.
- Fair and transparent allocation: tips must be distributed in a manner that is both fair and transparent.
- Mandatory tipping policy: employers in businesses where tips are frequently left must establish a clear tipping policy.
- Timely distribution: tips must be distributed to workers within one month following the month they were received.
- Right to tipping records: workers have the right to request a copy of their tipping record, enabling them to bring a claim to an employment tribunal if they believe they are not receiving the tips they are entitled to.
- Record keeping: employers are required to maintain records of how every tip has been handled for a period of three years from the date the tip was paid.
- Compliance with the Code of Practice: employers must adhere to the new statutory Code of Practice when distributing tips. You can view the Code of Practice in full here: https://www.gov.uk/government/publications/distributing-tips-fairly-statutory-code-of-practice
These measures are designed to ensure that workers receive the full amount of tips they earn, promoting fairness and transparency in the workplace. This should be a real boost for team morale in customer facing industries.
If you are a member of the HR Inner Circle, you can access our Employee Tips and Gratuity Policy here: https://members.hrinnercircle.co.uk/the-vault/templates-and-checklists