Zarah ChoudharyEffective from 1st October, employees and workers benefit from new laws which allow them to keep 100% of the money earned through tips.
Introduced through a Private Members’ Bill last year, the Employment (Allocation of Tips) Act and the statutory Code of Practice on fair and transparent distribution of tips, have now come into force.
Employers are now required by law to pass all tips, gratuities, and service charges on to workers, without deductions.
If an employer breaks the law and retains tips, staff will be able to bring a claim to an employment tribunal.
Employers could then be made to pay fines or compensation to staff.
The Department for Business and Trade estimated that these changes will mean around £200m will be received by workers that might otherwise have been retained by these employers.
Minister for Employment Rights Justin Madders said: “When you tip someone for good service, you expect them to keep all their tip. They did the work – they deserve the reward.
“This is just the first step of many in protecting workers and placing them at the heart of our economy.
“We will be introducing further measures on tipping to ensure workers get their fair share of tips.
“Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.”
The Employment Rights Bill further aims to ensure workplace rights are fit for a modern economy.
Andrew Tighe, director of strategy and policy at the BBPA, said: “This new framework will introduce a level playing field for all businesses, ensuring that those who were not already passing on all tips to their staff will now be required to.
“A greater a degree of consistency and transparency when dispersing tips will benefit both existing and new staff alike.
“We would urge all operators to review the guidance and ensure their policies are compliant with the legislation.”
Ben Thomas, CEO of TiPJAR, said: “Our hospitality and service industries are powered by a wonderfully diverse and exceptionally talented workforce.
“For the first time, these millions of workers can trust that tips employers collect on their behalf will always be passed to them.
“As a business providing a platform to get tips to workers quickly, fairly and transparently, we wholeheartedly welcome today’s announcement.
“We look forward to continuing our work with the DBT and government to develop further guidance as the principles of the legislation are put into practice, supporting businesses across the sector to operate to a consistent and equitable standard in handling tips.”
