Employment Law Update: Employment (Allocation of Tips Act) 2023

Steph Marsh, Head of Employment at Coodes, recently shared an article outlining a change to employment law. The Employment (Allocation of Tips) Act 2023, is a new piece of legislation that aims to reform the way tips and gratuities are distributed to workers.

Now, the Act and the accompanying statutory Code of Practice will come into force on 1 October 2024. This was confirmed on 31 July 2024 when they were laid before Parliament.

What does this mean for employers?

Key provisions of the legislation

The key provisions of the legislation encompass a requirement for employers to pass on tips in full to workers in a way that is fair and transparent. Employers should consider the new statutory Code of Practice when distributing tips or risk not adhering to employment law.

Moreover, businesses receiving tips more than occasionally are required to have a tipping policy in place. This policy should be available to all members of staff to review. There is also requirement for employers to keep a record of how every tip has been distributed for three years from the date the tip was paid.

There is a requirement to distribute tips within one month following the month in which they were received.

Workers who believe they are not receiving the tips that they should be, have the right to request a copy of their tipping record. This is so they can bring a claim to an employment tribunal should an employer not adhere to employment law.

Stay up to date

It’s important for employers to stay up to date with the changes and to keep their employees informed too. At Coodes, our Employment team is always available should you have any further questions in relation to the new legislation.

We will be able to provide advice and assist with drafting a Tipping Policy or other related employment law queries. Contact Steph Marsh on 01579 324017 or email steph.marsh@coodes.co.uk. Alternatively, you can fill out our online contact form.