On 31 July 2023, some provisions of the Employment (Allocation of Tips) Act 2023 were brought into force, via the Employment (Allocation of Tips) Act 2023 (Commencement No 1) Regulations 2023, in order to enable the creation of a new statutory code of practice for the purpose of promoting fairness and transparency in the distribution of qualifying tips, gratuities and service charges.
When the main provisions of the Act are brought into force, on a date yet to be determined (but expected to be in 2024), employers will be legally obliged to:
- Allocate all tips, gratuities and service charges which they are paid, or which they exercise control or significant influence over, to workers without any deductions; and
- Ensure that qualifying tips, gratuities and service charges between workers are fairly distributed and paid to the workers no later than the end of the following month after receipt from the customer.
A new statutory code of practice will provide guidance to employers to enable them to meet these new legal obligations. The Act contains several enabling provisions, which have been brought into force from 31 July 2023, to provide for the creation of this statutory code of practice. A consultation on the draft code of practice is expected later this year. We will report any developments in due course.
For further information, please contact:
Emma Ahmed, Hill Dickinson
emma.ahmed@hilldickinson.com
