[UK] Understanding The Employment (Allocation of Tips) Act 2023

In the UK, The Employment (Allocation of Tips) Act 2023 has received Royal Assent and is set to commence operation around May 2024. Mondaq summarises the implications for employers.

This legislation could potentially benefit 2 million workers. It assures the fair allocation of tips, gratuities and service charges paid by customers.

The Act is highly significant for businesses in the hospitality industry such as restaurants, bars, pubs, hotels and cafes. The Secretary of State will soon reportedly develop a Code of Practice to promote fair and transparent distribution.

Key changes:

• Employers will reportedly be required to keep a record of qualifying tips and their allocation for three years
• Workers can request information about their employer's tipping record, including business earnings and distribution
• Workers will have the right to file a complaint with the Employment Tribunal if their employer does not comply with the new duties, with a more flexible limitation period of 12 months to bring a claim
• Tribunals will have the power to order tips to be paid to all employed workers, not solely the Claimant
• Tribunals may also award up to £5,000 per Claimant to compensate for any additional financial losses due to the employer's non-payment.

Mondaq says it includes agency workers in its reference to ‘workers’.

Takeaways for businesses

This is the first time an express statutory requirement for employers to have a formal written policy in place will exist. In this instance, it is regarding the handling of tips. The enforcement date has yet to be announced but employers must be aware that it is pending and ensure a legally compliant policy is in place by that date.

Source: Mondaq

(Link via original reporting)

In the UK, The Employment (Allocation of Tips) Act 2023 has received Royal Assent and is set to commence operation around May 2024. Mondaq summarises the implications for employers.

This legislation could potentially benefit 2 million workers. It assures the fair allocation of tips, gratuities and service charges paid by customers.

The Act is highly significant for businesses in the hospitality industry such as restaurants, bars, pubs, hotels and cafes. The Secretary of State will soon reportedly develop a Code of Practice to promote fair and transparent distribution.

Key changes:

• Employers will reportedly be required to keep a record of qualifying tips and their allocation for three years
• Workers can request information about their employer's tipping record, including business earnings and distribution
• Workers will have the right to file a complaint with the Employment Tribunal if their employer does not comply with the new duties, with a more flexible limitation period of 12 months to bring a claim
• Tribunals will have the power to order tips to be paid to all employed workers, not solely the Claimant
• Tribunals may also award up to £5,000 per Claimant to compensate for any additional financial losses due to the employer's non-payment.

Mondaq says it includes agency workers in its reference to ‘workers’.

Takeaways for businesses

This is the first time an express statutory requirement for employers to have a formal written policy in place will exist. In this instance, it is regarding the handling of tips. The enforcement date has yet to be announced but employers must be aware that it is pending and ensure a legally compliant policy is in place by that date.

Source: Mondaq

(Link via original reporting)