The Employment (Allocation of Tips) Act 2023 amends the Employment Rights Act 1996 to insert new legal obligations on bar and restaurant employers. It is expected by Government that the Act will come into force in May 2024, about a year after Royal Assent. In the meantime, the Secretary of State for Trade and Business will be drafting a new Code of Practice upon which there will need to be consultation. The Code will set out the details of how the Government expects employers to implement the scheme.
What will this mean for employers in the hospitality industry?
This legislation requires employers to ensure that all tips, gratuities and service charges they receive or exercise control over must be paid to workers in full without deductions and by the end of the following month. It would also introduce obligations to ensure the fairness of arrangements to distribute those tips among workers, either when distributed by the employer or via an independent tronc. Under the Act, the Secretary of State is obliged to introduce a new code of practice about the fair and transparent distribution of qualifying tips, gratuities and service charges which will help to indicate what will count as a fair distribution for the purposes of the new legal obligations. It will also allow for the enforcement of the new rights through the employment tribunal system, providing increased protection for employees in the hospitality industry.
These provisions would apply both to those working directly...
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