Tips are due to change from 1st October for all staff.
A Step Towards Fairness: Tipping Act Set to Come into Force with New Code of Practice Next week.
Millions of UK workers are set to benefit from the changes in tipping legislation, as the Tipping Act 2023 creeps closer next week. With the recent introduction of a Code of Practice on the fair and transparent distribution of tips, businesses will be required to ensure that their employees including agency workers receive the tips they have rightfully earned. This significant step is expected to boost workers’ earnings.
The new Code of Practice, which will be legally enforceable under the Employment (Allocation of Tips) Act 2023, provides workers with greater transparency and protection when it comes to service charges. For more than 2 million workers in the hospitality, leisure, and services sectors, this overhaul in tipping practices is set to be a game changer, especially during a time when the cost of living continues to rise.
What Does the New Code Mean for Workers?
Once in force (expected from 1st October 2024), the Tipping Act and the accompanying Code will ensure that:
- Employers cannot withhold service charges from staff and agency workers. All tips and service charges must be passed on fairly to the employees who earned them.
- All workers will have the right to view their employer’s/hirers tipping policy and records, providing transparency in how tips are distributed.
- The Code of Practice can be used as evidence in an employment tribunal, providing legal backing for employees seeking fair treatment regarding their tips.
This marks a significant shift for the hospitality industry, where tipping practices have been inconsistent, often leaving workers in the dark about how much of their tips they are entitled to receive.
Why Does This Matter?
For many hospitality workers, tips make up a significant portion of their income, helping to bridge the gap between wages and the rising cost of living. In the past, some businesses have been known to hold back a portion of tips or distribute them unfairly, leaving workers at a disadvantage. With this new Act, workers will no longer be left in the dark about where their tips are going.
This reform offers a fairer system for workers across the hospitality, leisure, and service industries, ensuring that those on the frontlines, providing service to customers, receive their full share of what they have earned.
Conclusion
The introduction of the Tipping Act is a major step toward securing fairness and transparency in the distribution of tips. By bringing these new rules into force, the Government is helping to alleviate financial pressures for millions of workers, ensuring they take home their hard-earned money.
For businesses, this is a chance to review and align their tipping policies with the forthcoming legislation, creating a fairer work environment and maintaining trust between employers and their teams.
From the 1st October 2024, employers must prepare for the new tipping regulations, while workers can look forward to a fairer, more transparent tipping process that recognises and rewards their efforts in the service industry.
