The Secretary of State for the Department for Business and Trade (DBT) Kemi Badenoch to publish a draft code of practice on fair and transparent distribution of tips.

The code seeks to promote fairness and transparency in the distribution of tips that fall in scope of the Employment (Allocation of Tips) Act 2023. It comes into effect on 1 July 2024. This Code applies to England, Scotland and Wales and will be reviewed periodically to ensure it remains up to date.

In its response to the consultation on the proposed tipping code of practice, UKHospitality said the code rightly enables businesses to reflect the circumstances in which they operate, without being too prescriptive and burdensome.

It said the vast majority of the sector will already be operating in the spirit of the new legislation, ensuring transparency and fairness to team members through existing tipping policies.

A number of areas have been highlighted for improvement, in particular how agency workers are treated by the legislation. The current legislation requires businesses to include agency workers in tip distribution, but this could cause significant administrative difficulties and reduce tips for contracted workers.

The consultation response comes as UKHospitality launches brand new, detailed guidance on the legislation, which comes into force on 1 July 2024. The guidance takes businesses through the detail of the new rules and what they need to adhere to. It is exclusive for UKHospitality members.

Kate Nicholls, Chief Executive of UKHospitality, said: “Tips are a valued bonus for our staff and are an important way in which guests can show their gratitude for brilliant service, high-quality food or enjoyable experiences.

“Instilling fairness and transparency around tipping processes has been a focus for the sector over a number of years and I have no doubt that the sector is overwhelmingly already operating in the spirit of the new legislation.

“UKHospitality has been the only trade body engaging with the Government on behalf of the whole sector on these new rules and our input has ensured that the draft rules provide much-needed flexibility for a varied and complex sector.

“Despite this, it’s absolutely critical that businesses familiarise themselves with the requirements under the new legislation and ensure they’re adhering to all its requirements.

“Our member-only guidance will enable businesses to do just that and I’d encourage all members to read it in detail ahead of 1 July 2024.”