Staff can keep tips under new law..

The UK government formally backed the Employment (Allocation of Tips) Bill at its second reading in parliament on 15th July 2022, where it was passed by MPs.

It will be unlawful for businesses to withhold well-earned service charges from their employees. The Bill, once in law, will ensure that all tips, gratuities and service charges paid by customers are distributed to the staff. The Employment Rights Act 1996 would also be amended to cover the new obligations on employers.

This law will benefit more than 2 million workers and the workers will have rights to request tipping records from their employers under section 27J(3). A worker may also bring before an employment tribunal for their employer’s non-compliance with this legislation on tips. A new statutory Code of Practice guidance will be available to businesses and staff on the distribution of tips.

Workers in the hospitality, leisure and service sectors, who heavily rely on tips, stand to benefit from this reform. It will also help reduce the pressures generated by global inflation and an increase in the cost of living.

 

If you want to discuss any of the issues raised in this Blog, Vajiha Ali from our employment team would be happy to help and you can contact her on vah@bbmsolicitors.co.uk or speak to her on 01955 604188.