In 2016, the government opened a consultation to consider whether tips and gratuities should go direct to staff without deductions (other than for tax and NI). Then in 2018, it indicated that it would introduce legislation to ensure that tips left for workers would go to them in full.
It's finally picked this issue back up and has published a formal response which explains what the legislation will cover.
The measures will require employers to:
- pass on tips to workers without any deductions (other than those required by law)
- distribute tips in a way that is fair and transparent
- have a written policy on tips and keep records of how tips have been distributed
- distribute tips to staff within a specific timeframe
- allow workers to make a request for information about tipping and require employers to respond within four weeks
- comply with a statutory Code of Practice on tipping.
It appears that employers which ignore the new rules might be fined. Plus, workers can complain to an employment tribunal to obtain compensation.
The legislation will be included in an Employment Bill which has not yet been published. It could, therefore, take some time before this becomes law.
The government estimates that the legislation will help around two million people working in one of the 190,000 businesses across the hospitality, leisure and services sectors.
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