The implementation of new tipping laws has been pushed back three months to 1 October, which will give businesses time to implement required changes.

Yesterday (April 22), the Government introduced the Code of Practice on the fair and transparent distribution of tips that will have legal effect under the Employment (Allocation of Tips) Act 2023.

The updated Code of Practice will be statutory and have legal effect, meaning it can be introduced as evidence in an employment tribunal.

The Act and secondary legislation make it unlawful for businesses to hold back service charges from their employees, ensuring staff receive all of the tips they have earned. The measures are expected to come into force on 1st October 2024, once they have been approved by Parliament.

This overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and services sectors helping to ease cost of living pressures and give them peace of mind that they will keep their hard-earned money.

Business and Trade Minister Kevin Hollinrake said: “It is not right for employers to withhold tips from their hard-working employees.”

“Whether you are cutting hair or pulling a pint, this government’s legislation which will protect the tips of workers and give consumers confidence that when they leave a tip, it goes to the hardworking members of staff.”

“The secondary legislation laid today reinforces our commitment to legally protecting our low paid workers and ensuring a fair day’s pay for a fair day’s work.”

CEO of Tipjar, Ben Thomas said: “Hospitality and service industries are part of the fabric of our culture and a cornerstone of our economy.”

“We are honoured to have consulted with the Department of Business and Trade as they have developed this important Code of Practice clarifying employers’ responsibilities as they pass tips to their hard-working teams.”

“As a business that exists to help employers distribute tips on the same principles of fairness and transparency, we are confident that this Act will support millions of tipped workers across the UK, and level the playing field for businesses across these sectors. We’re excited to support employers in leveraging the opportunities this will present, as we build a more fair and transparent future.”

Kate Nicholls, Chief Executive of UKHospitality, said: “Hospitality is a people business and it’s so important that we reward our staff through a fair and transparent tipping system.

“We’ve been pleased to support this legislation through its journey and it’s good to see that the Government has worked with UKHospitality to deliver guidance and a code of practice that can work for business. With the variety of businesses in hospitality, anything too prescriptive would not have been practical.

“Delaying the implementation for a further three months is an appropriate step. The revised timeframe will now allow businesses to implement any changes required and is evidence of Government acting on feedback from UKHospitality.

“It is disappointing, however, that the Government has not provided greater clarification of agency workers and the payment of tips, which is a particular sticking point for businesses.

“Given the desire from all parties involved to get this legislation right, we would urge Government to work with UKHospitality on providing greater clarity on this issue before the legislation comes into force in the Autumn.”

UKHospitality has provided exclusive guidance for its members on the new tipping legislation and will be holding a webinar on Wednesday 24 April to go through the finalised code of practice.