Business owners whose staff are given tips by customers must now ensure every penny given goes to the workers and none of it is kept by the business owner. The rule change, which came into effect on October 1, is expected to add around £200m to the pockets of workers in industries such as hospitality.
The changes require all tips, gratuities, and service charges to be passed to employees without any deductions. Any employer who fails to adhere to this can be taken to an employee tribunal. Most business owners do pass on all tips, but there are still some who fail to do this, something the Government deems “unacceptable tipping practices”.
Justin Madders, Minister for Employment Rights, said: “When you tip someone for good service, you expect them to keep all their tip. They did the work – they deserve the reward.
“This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.
“Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.”
Other measures to strengthen workers’ rights
This is just one measure on the cards to improve the rights of workers to ensure they are treated fairly by employers. Errant bosses can expect to be punished if they fail to meet the expected standards.
The Employment Rights Bill “will ensure workplace rights are fit for a modern economy, empower working people and drive economic growth” according to the Government. The aim is to create a balance between protecting workers’ rights and supporting businesses across the UK.
Ben Thomas, CEO of TiPJAR, said: “Our hospitality and service industries are powered by a wonderfully diverse and exceptionally talented workforce. For the first time, these millions of workers can trust that tips employers collect on their behalf will always be passed to them.
“As a business providing a platform to get tips to workers quickly, fairly and transparently, we wholeheartedly welcome today’s announcement. We look forward to continuing our work with the DBT and government to develop further guidance as the principles of the legislation are put into practice, supporting businesses across the sector to operate to a consistent and equitable standard in handling tips.”
You can find more information on the Code of Practice: Distributing tips fairly: statutory code of practice on Gov.uk, along with non-statutory guidance for employers on distributing tips fairly, also on Gov.uk.
