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Tag: allocation of tips

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 is planned to come into force on 1 July 2024.


What’s new?

The Government has been consulting on its draft Code of Practice (available here) to accompany the legislation. The Code is intended to come into force at the same time as the Act on 1 July 2024.

The Code provides guidance on how employers can meet the requirements of ‘fair and transparent’ distribution of tips under the Act, so that workers are aware of their rights.

The Code contains the following sections:



This is the key principle that underpins the Act. The guidance suggests fair reasons for why workers may not receive the exact same allocation. For example,

Methods of allocation: for example, using an independent tronc operator.


Addressing problems:

Glossary of terms: this provides definitions of key terms such as ‘agency worker’ and ‘basic pay’.

The Consultation closed on 22 February 2024 and hopefully we’ll be able to update you on the Government’s response to this shortly.

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.


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