Millions of UK workers will be able to take home more of their hard-earned cash under the new legislation, the Employment (Allocation of Tips) Bill.
The bill will ensure that all tips go to staff by making it unlawful for businesses to hold back well-earned service charges from their employees.
This overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and services sectors – who tend to rely on tips the most – and will help to ease pressures caused by global inflation and an increase to the cost of living.
Business Minister Jane Hunt said the 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. On top of this, workers will receive a new right to request more information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal.
Dean Russell, Conservative MP for Watford, said the move towards a cashless society has exacerbated the problem of companies keeping card tip payments for themselves, and the new legislation will ban that practice.
UK Hospitality chief executive, Kate Nicholls, said tips and service charges provide a significant and welcome boost to hospitality employees’ take-home cash.
“This should also reassure prospective hospitality sector workers at a time when the industry is seeking to fill vacancies,” she said.
The reforms follow a range of government actions to support people with the cost of living and help those on lower incomes keep more of what they earn. Most notably, earlier this year the government increased the National Living Wage to £9.50 per hour – equivalent to an extra £1,000 a year for a full-time worker – with a full campaign that encouraged workers to check their pay.
In addition, the government recently announced a widening of the ban on exclusivity clauses, giving the lowest paid workers flexibility to top up their pay and work multiple jobs if they wish.
