The Allocation of Tips Act 2023
The cost of living in the Uk has been rising over the past year, gas prices are souring largely in response to the conflict in Ukraine, food and energy prices have been rising markedly and?the price of consumer goods and services has risen?significantly. This has impacted customers' spending habits, forced restaurants and bars to close and has resulted in strikes. It has been reported that train strikes have cost bars, pubs, restaurants and hotels in the UK at least ￡1.5bn just in December. This has all had a very negative impact on the hospitality industry, so what's the good news???
The Allocation of Tips Act 2023 has received royal accent this month and it is expected that its measures will come into force in 2024. This bill was?put into place to ensure that all tips, gratuities and services charges paid by customers are allocated to workers. This will require companies to be transparent about their tipping and service charge policies and will give employees the right to challenge any decision made by their employer on the allocation of tips. If the employer was to break any of the new rules, they could be taken into an employment tribunal which could result in compensation and fines. ?
Business and Trade Minister “As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees.”?
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?This really is a breakthrough for hospitality employees as an estimated ￡200 million a year will go back into the pockets of hard-working staff by retaining tips that would have otherwise been deducted.?
Most companies in the hospitality industry use agency workers alongside staff that are employed full time. Under the bill, agency workers would have a statutory right to receive a fair share of tips on the same basis as directly employed staff. Businesses must pass on the agency worker’s share of tips to the supplying agency, who are then required to pay those amounts to their workers within a month of receipt from the operator.?
There is so much more that can be done to aid the hospitality industry during these difficult times and the passing of this bill is a great step forward.?