Tips policy
From 1 October 2024, The Employment (Allocation of Tips) Act 2023 (“Tipping Act”) will come into force. Until now, employers were not forced to pass on tips to their employees and some employers kept them. This new act ensures that tips left by customers because they have received good service are passed on to the workers who have provided the service, rather than retained or unfairly distributed by the employer.
What does this mean for employers?
- All tips, gratuities and service charges must be paid to workers (previously only cash tips had to be paid to employees)
- Employers must have a written policy on how tips are dealt with that is available to all workers
- Tips must be paid no later than the month after the tip was received
- Employers must keep accurate records because workers will be able to make a complaint to the Employment Tribunal if they feel that their employer hasn’t complied
If you are in a business that receives tips, and don’t have a policy in place, you must introduce a policy by 1 October 2024 at the latest and inform staff about the policy.
Please do get in touch with the team if you need any help with drafting a Tips policy.