Withholding tips from staff becomes unlawful as the Tipping Bill achieves Royal Assent

24th July 2023

The Employment (Allocation of Tips) Act 2023, which received Royal Assent on Tuesday 2nd May 2023, willmake it unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned.

Many 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. As someone who likes to tip for good service it’s been disappointing in the past to hear that the money I have left to show my appreciation doesn’t go to those who deserve it. I have also received requests of please could you not tip on card as it goes to the head office and the staff at these premises won’t receive.

However when this law comes into place millions of UK workers will take home an estimated £200 million more as employers are banned from withholding tips under the Employment (Allocation of Tips) Act 2023.

The new law requires 100% of service charges to be distributed fairly, transparently, and consistently to staff, even agency workers are included. The measures are expected to come into force in 2024, following a consultation and secondary legislation.

If you would like further guidance on this topic, we would be happy to meet with you for a chat so please book a call with Caroline as I am regularly monitoring developments in the Employment (Allocation of Tips) Act 2023 in preparation of its commencement.

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