Update: Bill making it unlawful to withhold tips from staff achieves Royal Assent

In our blog published earlier this year, we referenced the Employment (Allocation of Tips) Bill 2022-2023 (“the Bill”) which suggested the following changes to the current practices:

• the creation of a legal obligation for employers to allocate all tips, gratuities and service charges (including those over which they exercise control or significant influence) to workers without deductions;
• the introduction of a requirement for employers to ensure that the distribution of tips, gratuities and service charges between workers is fair;
• the requirement for employers to make available to their workers a written policy setting out how tips are dealt with and allocated; and
• the requirement for employers, upon the request of workers, to share records of the qualifying tips they have received and the amount of those tips which have been allocated to the requesting worker.

The Bill also confirms that if an employer has a fair and compliant tronc system in place, it will have fulfilled its duty to allocate tips between employees.

The Bill received Royal Assent earlier this month (on 2 May 2023), with the official commencement date to be confirmed “later this year” but anticipated to be around May 2024.

The Government has estimated that roughly “£200 million a year will go back into the pockets of hard-working staff” and that this “overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and service sectors”.

If you would like to discuss any of matters relating to tips, troncs or wider hospitality matters, please contact Elliot Francis, Linky Trott or any other member of the Employment team.

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