The success of our hospitality and service industries is driven by a diverse and exceptionally talented workforce. Starting Tuesday, 1st October, new laws will come into effect ensuring workers receive 100% of the tips they’ve earned.
New Laws Protect Workers’ Tips: What You Need to Know
- New laws ensuring workers keep all of their hard-earned tips are now in effect
- These changes are expected to boost wages, putting £200 million back into workers’ pockets
- This comes ahead of the Employment Rights Bill, which will further strengthen workers’ rights and ensure fair pay
The Employment (Allocation of Tips) Act, introduced last year, is now live along with a statutory Code of Practice for fair and transparent tip distribution.
How the Employment (Allocation of Tips) Act Will Boost Wages
Under the new rules, employers must pass all tips, gratuities, and service charges directly to workers without making any deductions.
From Tuesday, 1st October, workers can take employers to an employment tribunal if tips are withheld. While most businesses already pass tips to staff, these laws aim to stop the small number of businesses that still engage in unfair tipping practices.
Employers who break the law could face fines or be ordered to compensate staff. It’s estimated that these changes will put around £200 million back into workers’ pockets, money that would otherwise have been kept by employers.
This legislation is designed to build trust between customers and businesses and ensure fair treatment for all workers.
What Employers Should Do Now: Ensuring Compliance with New Tipping Laws
At HB Accountants, we encourage all operators to review the new guidance and ensure their policies comply with the law.
Gov.UK have published guidance for employers and workers on the fair and transparent distribution of tips.
The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any error
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