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Changes to tips and gratuities

Tips and gratuities

It is not uncommon in certain situations, e.g. when dining out, to tip your waiter/waitress. Within the UK, however, there are no current laws which state that the tips must go to the employees.

As such, you may have found yourself asking the following question,

“Do you get to keep your tips?”

The government have unveiled plans to overhaul tipping practices to ensure all tips go to workers which will make the previous question redundant.   

The reason behind the review legislation

The reason for the change is because some companies withhold cash from hardworking staff who have been tipped by customers as a reward for good service. Not only will the plan provide a boost for workers in pubs, cafes and restaurants across the country, but it also will provide reassurance to the customers that their money is going to those who deserve it.

It is undeniable that we are moving towards being a cashless society: a factor which has accelerated questionable tipping practices as simply adding an additional tip on top of the receipted amount via a card payment has made it easier for businesses to keep the funds. A significant 80% of all UK tips are now provided by card, rather than cash going straight into the pockets of staff.

The new legislation will include:

  • A requirement for all employers to pass on tips to workers without any deduction
  • A Statutory Code of Practice setting out how tips should be distributed to ensure fairness and transparency
  • New rights for workers to make a request for information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal. Under the new legislation, if an employer breaks the rules they can be taken to a tribunal, where employers can be forced to compensate workers, often in addition to fines
  • Tipping legislation will form part of a package of measures which will provide further protections. Building on economic support measures, the government recently announced a range of initiatives to support the hospitality sector through its first-ever Hospitality Strategy. This set out ways to help the sector improve its resilience, including by making hospitality a career option of choice, boosting creativity, and developing a greener sector.

It has now been confirmed that the new legislation will come into force in October 2024

Once these plans are fully implemented, they will support two million UK workers who are working in one of the 190,000 businesses within the hospitality, leisure and services sector, to retain their hard-earned and well-deserved tips.

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Angela Clay

A qualified employment law solicitor and our managing director, Angela has unparalleled legal expertise and decades of experience and knowledge to draw from. She’s a passionate speaker and writer that loves to keep employers updated with upcoming changes to legislation, and is a regular guest speaker on BBC Leicester Radio.