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New law to ensure workers can keep tips in full

Following the 2016 consultation on tips, gratuities, cover and service charges, the government has confirmed it will pass legislation to ensure workers can keep tips they receive for their service in full.

When passed, the new Employment Bill will introduce the following rules:

  • Employers will need to be aware of the new statutory Code of Practice on Tipping, which will replace the existing voluntary code;
  • Workers will be able to inquire about the employer’s tipping record and employers should respond to this request within 4 weeks in a way they see fit;
  • Employers in any sector cannot deduct from tips their staff may receive, except for tax purposes;
  • Employers will need to distribute tips in a fair and open manner by the end of the month, after the month in which the customer paid the tip;
  • Employers will need to produce a written policy on how tips are to be managed and should keep a written record of how tips are handled.

These new rights will become enforceable by workers in the employment tribunals and should come into force at least one year after the Bill’s enactment.