Minister for employment rights Justin Madders has unveiled plans to introduce further measures on tipping stating that the tipping bill was “the first step in many” of Labour’s reforms for workers.
The Employment (Allocation of Tips) Act 2023, referred to as the Tipping Act, received royal assent in 2023 and will make it unlawful for employers to retain or withhold any qualifying tips (tips, gratuities and voluntary service charges).
The Act was due to be introduced in England, Scotland and Wales on 1 July 2024, but was delayed a further three months, coming into force on 1 October 2024, and will cover England, Scotland and Wales, requiring employers to pass on all tips and service charges to staff without deductions and provide a written policy on how tips are dealt with.
However, the Labour government has also confirmed plans for further legislation around tipping.
Justin Madders, the minister for employment rights, said:
“Britain’s outdated employment laws require an urgent update. This government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.”
“We will be introducing further measures on tipping to ensure workers get their fair share of tips.”
“Today’s [July 29] announcement is just the first step of many in protecting workers and placing them at the heart of our economy.”
The code of practice does not set out a complete list of factors for employers to consider but is aimed to provide primary principles on how to fairly apply the code.
The legislation applies to all tips that are either received by the employer or over which the employer exercises control. Payments made directly to an individual worker by cash or via an app are outside the scope of the Code.
The government said non-statutory guidance will be published in due course to help employers and workers interpret the legislation.
In the event of non-compliance, qualifying staff will be able to bring a claim against the business in an Employment Tribunal which has the power to confirm that the employer is in breach of the act, order that they revise the allocation and enforce compensation payments of up to £5,000.
