The Employment Allocation of Tips Act 2023 comes into force on 1st October 2024.
The Act makes it mandatory for all tips to be passed on to workers without deductions.
Employers will have to ensure that the amount of qualifying tips is allocated ‘fairly’ between workers. There is a statutory code of practise on fair and transparent distribution of tips that can be found here: Code of practice on fair and transparent distribution of tips (HTML version) - GOV.UK (www.gov.uk) This provides guidance to employers on what amounts to a fair allocation.
On the 27th September 2024, the government added to this by issuing non-statutory guidance for employers. This can be found here: non-statutory guidance for employers
This non-statutory guidance outlines:
- Employers are obliged to take into account agency workers when considering the distribution of tips. It is intended that agency workers should not be disadvantages by virtue of being engaged through an agency.
- Employers are prohibited from pooling tips received across different sites or branches. Tips must be distributed between the workers at the place where tips are received.
- All workers involved in directly providing a service should be considered in the distribution of tips. However, this principle will vary depending on the specific circumstances of the industry.
- There are time limits for workers to present a complaint for either failing to distribute or failing to provide information regarding tips.
- A template for tipping policy and tipping recording.
Should your business require advice in light of the Employment (Allocation of Tips Act) 2023 coming into force tomorrow, please contact Gareth Dando, Partner in Employment Law on 01484 558060 or email Gareth.dando@ramsdens.co.uk. To contact Emily Walker, Associate Solicitor in Employment Law, ring 01484558081 or email Emily.walker@ramsdens.co.uk Alternatively, visit our Services for Business Employment Law page here.