The tips bill progresses through parliament
10 February 2023
The Employment (Allocation of Tips) Bill is a new legislation currently making its way through parliament, which imposes unlawfulness for employers to withhold tips from staff.
The simple aim of the Bill is to ensure that 100% of tips and service charges are passed onto staff. The Employment (Allocation of Tips) Bill will promote fairness and transparency to ensure that workers receive the tips that they earn, no later than the end of the month following the month in which the tips were paid by customers. Businesses are to hold a written tipping policy and keep records of all received and ‘fairly’ allocated tips. The Bill is estimated to benefit approximately 2 million workers in the hospitality, leisure and services sectors. For many businesses, this may mean a call for help or review from the Troncmaster.
In July 2022, the government stated:
‘‘Today’s reforms follow a range of government action to support people with the cost of living and help those on lower incomes keep more of what they earn.’’
Business minister, Jane Hunt said:
‘‘Whether you are pulling pints or greeting guests, today’s reforms will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.’’
Through the Bill, a new statutory Code of Practice will be developed to provide businesses and staff with advice on how tips should be distributed. Exact details in relation to a “fair” allocation is yet to be set out. However, payroll professionals should act now to ensure that they are compliant when the new conditions come into force. An audit of operations and arrangements may need to be carried out, to ensure that 100% of tips and service charges are allocated to relevant workers within the time period required. Some areas to consider will be written policies and possible consultations with workers, however, the CIPP will provide an update on the Bill as soon as the information is released.
You can read more on the topic of tips here.
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