New law on tipping in hospitality and leisure

After much discussion within the hospitality industry and unions, the Employment (Allocation of Tips) Act 2023 (or Tipping Bill) has received Royal Assent.

But it won’t come into force until around May 2024.

Its aim is to ensure that employers allocate all tips and service charges fairly between their workers, and will have most impact in the hospitality, leisure and services sectors.

It will enable workers to have their tips protected and to see the employer’s tipping record.

The Act requires employers to have a written policy on how they deal with tips, as well as keeping records of all tips and service charges received for three years. 

There are interesting enforcement time limits in the proposals, with 12 months for bringing a tribunal claim for the employer’s failure to pay over tips, and the usual three months for claims relating to an employer’s failure to comply with an information request (about how tips are allocated).

Tribunals will be able to compel employers to revise tip allocation policies, and be able to order employers to pay tips not just to a claimant, but also to any worker employed by the employer.

The legislation will come into force following a consultation period and will require secondary legislation.

Acas will also be drafting a new statutory Code of Practice which will also form part of the consultation.