The Employment (Allocation of Tips) Act 2023 aims to ensure that all tips are passed on to workers without deductions.
The Act requires that tips be passed on to workers in full, with very limited exceptions; that businesses have a tipping policy and provide this to their workers; that businesses keep records on distribution of tips; and gives workers a new right to request a copy of their tipping record, enabling them to bring a claim to employment tribunal in order to enforce their rights.
The Department for Business and Trade (DBT) has now decided that a statutory code of practice is needed to provide guidance to employers and workers in tipping industries on the fair and transparent allocation and distribution of tips.
It has therefore issued a draft code, which will apply in England, Scotland and Wales and invited businesses, workers, customers and other interested parties to comment on its provisions.
Details of this consultation, together with a copy of the draft code, can be found here and the deadline for responding to the DBT is 22 February 2024.
The code defines qualifying tips, qualifying workers, transparency and the key principles of fairness and methods of allocation and distribution (including troncs).
It states that an employer should ensure they have fair processes in place for resolving issues and responding to queries from workers who have not received the share of tips they expected to. For the purposes of fairness, employers should ensure they give equal weight to queries from agency workers as they do to their own, directly employed, staff.
Our HR comments- Code of practice proposed to help with fair distribution of tips | Consensus HR – Herts, Beds
Matthew P Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “This is a long overdue piece of legislation and is great to see that they are currently consulting. Having had the opportunity to work within the Hospitality industry within the bars and restaurants and Heathrow and Gatwick airport, we always had a few tips for service and the products we were offering, and this would be totalled up at the end of each day and divided equally between all team members who were working. The Charity did not take any, but this was in the days when cash was king and credit / debit cards were never used. Nowadays with cash not being king but credit / debit cards, I can be a lot harder to manage and companies need to have a detailed Policy & Procedure to follow and manage. At least this Act will help to ensure that all members of the team get their tips, but it will still be down to the company / management who gets the tip! Is it the team as a whole, or the person that served them? Personally, I prefer it to be split between all the team who were working on that day, because you are all part of a team and all play a part and if there is anybody that continually does not play their part, the team will tend to react, and management / business will need to take the appropriate action.!”
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