Employment (Allocation of Tips) Act 2023. Coming into force 1st July 2024.
At the HR Dept, we take pride in helping companies prevent people problems. One of the ways we do this is by ensuring business owners keep up to date with employment law changes, and one of the newest pieces of employment law comes into force on the 1st July this year and will impact heavily on the hospitality and service industries. It is the Allocation of Tips Bill. So, what is this new law?
Introduction
The purpose of the Employment (Allocation of Tips) Act 2023 (referred to as “the Tipping Act”) is to ensure the fair and transparent allocation of all tips, gratuities, and service charges. For brevity, “tips, gratuities and service charges” are referred to simply as “tips” throughout this document. The desired outcome of the Tipping Act is to improve fairness for workers by ensuring that the tips consumers leave in recognition of good service and hard work are going to the workers as intended. The Act aims to increase fairness in tipping practices and create a level playing field for employers who already allocate all tips to workers by ensuring that all employers follow the same rules.
The Code of Practice (Still in development)
The Tipping Act was granted Royal Assent on 2 May 2023. It amends the Employment Rights Act 1996 (“the 1996 Act”) and a Code of Practice will be introduced, so that employers will be required to:
Pass on all tips and service charges to workers without deductions, except in very limited scenarios, such as deduction of income tax.
Ensure that tips are distributed in a fair and transparent manner when the employer takes control, or exerts significant influence, over their distribution.
Have regard to the code of practice on fairness and transparency of tip distribution when they are distributing or influencing the distribution of tips.
Maintain a written policy on how tips are dealt with at their place of business, and ensure this policy is made available to all their workers.
Maintain a record of all tips paid at their place of business and their allocation and distribution between each worker, to which workers have the right to request access.
The Code of Practice will apply to all workers but not anyone self-employed.
So as employers what do you need to do?
Firstly, be aware of the changes and when they come into force.
Secondly, be prepared. You need to review any existing policies in line with the ACAS code of practice and bring them update or introduce a policy if you don’t currently have one.
Thirdly – ensure all your staff are aware of the policy and how it works in practice.
At the HR Dept, we help support SME’s in the North East with advice and practical solutions to HR problems, with everything from one off pieces of work such as contracts or handbooks, to an advice line and on-site support for all your HR needs and we are here to help you if need it. We are local so can be on site when you need us and we are not a call centre we really get to understand your business and its challenges.
If you need any help with this new legislation or you would like to have your existing policy reviewed considering these changes then please get in touch.
Diane Mactavish, HR Dept Newcastle North and North Tyneside. Call 0191 2838732 or email: diane.mactavish@hrdept.co.uk