The Employment (Allocations of Tips) Act 2023 makes provision for the fair distribution by employers of tips in those sectors such as hospitality where the practice of customers tipping staff is commonplace. The Act applies to all employees and workers, but not to self-employed individuals.
The Act requires employers to do the following in relation to tips:
- Tips must be passed on in full to workers and, when the distribution is controlled by the employer, they must be allocated in a fair and transparent way between workers at the place where they work. In determining what is a fair method of distribution, regard must be had to the statutory Code of Practice.
- A fair system of allocation and distribution does not necessarily mean employers must allocate the same proportion of tips to all workers, however any system should take into account all workers at an establishment, including agency workers. Employers should use clear and objective criteria to determine the allocation and distribution of tips and ideally consult on the policy and ensure all staff are aware of the system in place.
- Employers of businesses where tips are left on a frequent basis and not merely occasionally, must put in place a tipping policy which must outline whether the employer requires or encourages customers to pay tips and how they are dealt with in accordance with the Act.
- Tips must be distributed within one month following the month in which they were received.
- Employers must keep a record of how all tips are dealt with and distributed and retain these records for 3 years from the date on which tips are paid. Workers have the right to request a copy of their tipping record to enable them to bring a Tribunal claim where they believe they are not receiving the appropriate tips. Workers cannot make more than one request for their record in any 3-month period.
- Workers are entitled to bring a claim to an Employment Tribunal for failure by their employer to distribute tips fairly or pay the appropriate tips. They have 12 months from the date of failure to comply to bring such a claim. Workers can also bring a Tribunal claim for failure by their employer to have in place a written policy about tips.
- Where a worker challenges the allocation of tips and on a revision of the original allocation, it is discovered that they in fact received an over-allocation of tips, the Act prohibits an employer from being able to recover any overpayment.
- Employers must have regard to the new statutory Code of Practice when distributing tips.
If you wish to discuss anything mentioned in this article or any employment matters you may have please contact Matthew Ottley or a member of our employment team.
The Employment (Allocations of Tips) Act 2023 makes provision for the fair distribution by employers of tips in those sectors such as hospitality where the practice of customers tipping staff is commonplace. The Act applies to all employees and workers, but not to self-employed individuals.
The Act requires employers to do the following in relation to tips:
- Tips must be passed on in full to workers and, when the distribution is controlled by the employer, they must be allocated in a fair and transparent way between workers at the place where they work. In determining what is a fair method of distribution, regard must be had to the statutory Code of Practice.
- A fair system of allocation and distribution does not necessarily mean employers must allocate the same proportion of tips to all workers, however any system should take into account all workers at an establishment, including agency workers. Employers should use clear and objective criteria to determine the allocation and distribution of tips and ideally consult on the policy and ensure all staff are aware of the system in place.
- Employers of businesses where tips are left on a frequent basis and not merely occasionally, must put in place a tipping policy which must outline whether the employer requires or encourages customers to pay tips and how they are dealt with in accordance with the Act.
- Tips must be distributed within one month following the month in which they were received.
- Employers must keep a record of how all tips are dealt with and distributed and retain these records for 3 years from the date on which tips are paid. Workers have the right to request a copy of their tipping record to enable them to bring a Tribunal claim where they believe they are not receiving the appropriate tips. Workers cannot make more than one request for their record in any 3-month period.
- Workers are entitled to bring a claim to an Employment Tribunal for failure by their employer to distribute tips fairly or pay the appropriate tips. They have 12 months from the date of failure to comply to bring such a claim. Workers can also bring a Tribunal claim for failure by their employer to have in place a written policy about tips.
- Where a worker challenges the allocation of tips and on a revision of the original allocation, it is discovered that they in fact received an over-allocation of tips, the Act prohibits an employer from being able to recover any overpayment.
- Employers must have regard to the new statutory Code of Practice when distributing tips.
If you wish to discuss anything mentioned in this article or any employment matters you may have please contact Matthew Ottley or a member of our employment team.