Businesses to pay workers 100% of tips under new law

The new Tips Law and Code of Practice came into effect on 1 October 2024. 
 

• The new statutory Code of Practice on Fair and Transparent Distribution of Tips came into force on 1 October 2024.

• This means that from this date, all qualifying tips will need to be fairly allocated to staff, including agency workers.

• The Act provides that employers are required to have a written tipping policy when qualifying tips are paid at or are attributable to a place of business on more than an occasional and exceptional basis.

• Affected employers will need to set out how tips are accepted, how tips are allocated and distributed and what steps the employer takes to ensure that tips are handled fairly and transparently.

• A statutory Code of Practice was published on 29 July 2024, enabling workers to apply to an Employment Tribunal if they believe their rights have been breached. Tribunals are required to take the Code into account.

• The Employment Rights Bill requires employers to maintain a written tipping policy, consult with workers when creating or updating it, and review the policy at least once every three years.