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Over 2 million workers, largely in the hospitality sector, are set for a pay boost following the introduction of a new Tipping Bill to regulate how employers handle gratuities.
The Employment (Allocation of Tips) Bill, introduced by Dean Russell MP and backed by the government, will ensure that all tips go to staff by making it unlawful for businesses to hold back well-earned service charges from their employees, particularly as the pandemic has accelerated the transition to a more cashless society.
The Bill will see a new statutory Code of Practice will be developed to provide businesses and staff with advice on how tips should be distributed. On top of this, workers will receive a new right to request more information relating to an employer’s tipping record, enabling them to bring forward a credible claim to an employment tribunal.
Business Minister Jane Hunt said:
“At a time when people are feeling the squeeze with rising costs, it is simply not right that employers are withholding tips from their hard-working employees.
“Whether you are pulling pints or greeting guests, today’s reforms will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.”
Backbench Conservative MP for Watford, Dean Russell, has brought the legislation forward through Parliament as a Private Members Bill with the support of campaigners in the hospitality sector; he said:
“I am delighted that my Tips Bill has passed second reading in Parliament. It is fantastic that we are on track to securing a fair deal for millions of people working in hospitality across the country.
“It has always felt wrong that some employers have retained tips intended for their staff. This new legislation will halt this practice, particularly given the current challenges around the cost of living. I would like to thank all of the businesses and stakeholders that have got in touch to voice their support.”
UK Hospitality Chief Executive, Kate Nicholls, said:
“Tips and service charges provide a significant and welcome boost to hospitality employees’ take-home cash. So we’re delighted to see this proposed legislation recommend that employers can set a fair distribution policy for staff, meaning they all benefit. This should also reassure prospective hospitality sector workers at a time when the industry is seeking to fill vacancies.”