New tips legislation to come into effect

Hospitality businesses where staff receive tips need to make sure they are prepared for new legislation that comes into force on 1st October 2024.

The new ‘tips act’ is designed to regulate tipping and ensure that tips are allocated fairly and transparently. The Employment (Allocation of Tips) Act 2023 makes it unlawful for businesses to hold back service charges from their employees, ensuring staff receive all of the tips they have earned.

A Code of Practice for businesses to follow to ensure they are allocating tips fairly was also published the by previous government in April, and which can be used in employment tribunals where a business is accused of withholding tips staff believe they are entitled to.

Businesses need to have a written policy about how tips are allocated and records of what has been given and distributed to stay compliant.

To help hospitality businesses ensure they are handling tips in line with the new legislation, Stockport-based HR outsourcing business, Cornerstone Resources, have prepared an easy to read guide to support organisations to prepare for this change. The guide is free to download via the Cornerstone Resources website.