The Employment (Allocation of Tips) Act 2023 received Royal Assent on 2 May 2023.

The new law makes it unlawful for an employer to withhold tips, gratuities, and service charges ('tips') that are paid by its customers and requires employers to allocate tips to their hospitality and leisure workers in a fair and transparent manner.

This means that millions of UK workers will take home an estimated 200 million more.

What does the Act say?

The Act includes:

• A requirement that the employer pay tips to their workers by no later than the end of the month following the month in which the customer paid the tip.
• A requirement that the employer has a written policy in place that deals with tips in the workplace which is shared with all workers. This will only apply to businesses that receive regular tips. If a business receives occasional or exceptional tips, the employer must confirm that they are not required to have a written policy in place and explain why.
• A requirement to keep a record of how every tip has been dealt with. This needs to include the amount of the tip and the amount that has been allocated to workers (or if an independent tronc operator has been engaged, how the tips have been allocated by them). This record must be maintained for a period of 3 years from the date that the tip was paid.
• A right that a worker can make a written request for the employer to provide their tips records for a period specified in their request. This right is limited to one request in...

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