New Code of Practice on Allocation of Tips

Code of Practice on Allocation of Tips

What do we already know?

We updated you in previous Newsletters (here and here) about the introduction of The Employment (Allocation of Tips) Act 2023 which aims to ensure that all tips, gratuities and service charges are distributed to staff in a fair and transparent manner and paid without deductions. The Act requires employers (if tips are left more than occasionally)  to have a tipping policy and provide workers with a copy of their tipping record (if requested). This will help them to bring a Tribunal claim where they believe they are not receiving the tips they should be.

We also updated you in our Newsletter 2024 No.1 (here) on the draft Code of Practice (which will accompany the new legislation) and the Government’s consultation on this.

What’s new?

The Government has now published its response to its consultation on distributing tips fairly as well as final draft statutory Code of Practice (available here).  The plan is that both the Act and the Code will come into force on 1 October 2024 (it had previously been scheduled for 1 July 2024).

The Code also refers to non-statutory guidance being published in due course to help employers to comply with the Act.

The general election is not expected to affect the Act, Code or timescale.

In the meantime we recommend employers begin taking preparatory steps for the introduction of the Act and Code, including introducing practice arrangements to ensure fair allocation and distribution of tips, preparing a written policy regarding tip allocation and distribution, arranging for record-keeping of tips and ensuring internal processes are in place to deal with queries or complaints.