Allocation of Tips - Key Requirements & Actions To Consider

Do your employees receive tips as part of their pay package?  The Employment (Allocation of Tips) Act 2023 and its accompanying statutory Code of Practice will come into force on 1st October 2024.

This affects not only hospitality but also many beauty businesses and any businesses where employees receive tips. 

The key requirements of the new Act include:

• employers are required to pass on tips in full to workers

• tips must be allocated in a fair and transparent way

• employers of businesses where tips are left more than occasionally are required to have a tipping policy in place;

• tips must be distributed within one month following the month in which they were received;

• workers have a right to request a copy of their tipping record in order to enable them to bring a claim to employment tribunal where they believe they are not receiving tips they should be;

• employers are required to maintain a record of how every tip has been dealt with for three years from the date the tip was paid; and

• employers must have regard to the new statutory Code of Practice when distributing tips.

Actions to consider and what does this mean in practice:

• Keep an eye out for more of our updates

• Update your policies around allocation of tips

• Consult with staff about these changes

As always, we will keep you updated as more information is released and for those on our retained service you don’t need to worry as we have got you covered with the ongoing document and compliance reviews as part of your package.

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